Yesterday's market: The SET continued to rebound from late last week. However, the move was still within the previous range and there was selling that pressured the index to be volatile intraday because there was no fresh catalyst to provide support. Moreover, foreign equity markets also began to decrease, while global crude remained weak.
Today's outlook: FSS views the SET outlook to be downward after there was pressure from the selling when the index increased. This morning, investment sentiment in international stock markets started to weaken again after global crude tumbled by over 2% yesterday due to concern over supply glut. Both Morgan Stanley and Barclays Bank shared the same view that U.S. oil inventories remained very high. Moreover, there were reports that U.S. oil rigs continued to increase, while we anticipate some investors to choose to remain on the sidelines, waiting for Fed Chair's statement after FOMC meeting on July 26-27 and U.S. key economic data (i.e. service-sector PMI and new home sales) that are due out tonight.
Strategy: We expect the SET to fall to build up base before it turns to a new round of rallies. For this reason, we recommend that investors look for opportunity to sell to lock in profit when the index increases and wait to buy on weakness.
Support: 1510-1505 , 1502-1497
Resistance: 1515-1517 , 1520-1524
Source: fnsyrus.com / settrade.com
