US stock markets closed for Independence Day, oil prices down slightly: In the spotlight today will be key market-moving PMI data out of major global economies while US ADP employment report and nonfarm payrolls data will be the economic highlight of the week. Against the backdrop of worries about mounting debt in China, any economic misses may bring global economic concerns back to the forefront of the market though it could be followed by hopes of further stimulus measures as the positive impact would only be short-lived.
Bullish market sentiment intact but room for upside limited, focus on short-term trading: Currently the SET index is trading near 16x forward P/E (~1460 points) as market sentiment received a short-term boost from dissipating fears of post-Brexit uncertainty and foreign investors turned net buyers of Thai stocks again. However, statistics indicates the scope of possible institutional selling after window dressing buying spree in late Jun and amid the current rich valuation, leaving the market vulnerable to a bout of profit-taking. The trading range for the SET index is expected to be between 1440-1460 points today.
Earnings play: Bank shares rallied on Mon, probably due in part to earnings speculation as bank earnings season is due to kick off next week.
Investment strategy: A selective strategy remains the preferred choice. Any rallies should be used as profit-taking pportunities.
(1) Tourism recovery play: Hold onto AOT.
(2) Selective play: Hold onto PTTGC and short positions on THAI.
(3) Upside momentum play: Hold onto TWPC, ERW.
(1) Tourism recovery play: Hold onto AOT.
(2) Selective play: Hold onto PTTGC and short positions on THAI.
(3) Upside momentum play: Hold onto TWPC, ERW.
Source: poems.in.th / settrade.com
