Ploy with her latest thoughts on the markets as per her charts, while she initially states that market may have further strength she does make a good point regarding the slowing foreign fund flow into the SET Index and that it may have a negative impact on the markets as its been the key reason for the fantastic YTD performance.
I will be brief today.
The SET has breached above the 1,214-1,224 resistance, given in my previous comment, and the short-term outlook is slightly more positive. For this week, the resistance is at 1,247-1,250 and the support is at 1,200-1,195.
The upside in the SET is also seen, when compared with the Dow Jones: the SET may outperform the U.S. market for a considerably large gap. Meanwhile, Dow Jones may face difficult time as it has to make a rebound and successfully breach its strong barrier at 13,250-13,340 in order to look improving. In conclusion, I think we can bet with the SET until we reach 1,247-1,250 resistance.
On the risk side, the US dollar index is testing the resistance at 79.80. On breakout, the next resistance awaits at 80.17. The breakout above both resistances will add more pressure to the equity markets and is something we have to be aware of. The support for the US dollar index is at 79.10-79.
Another risk factor is the foreign volume in the SET. As shown below, the foreign volume is still stalling at the same resistance, shown once last month. Backing down from this resistance is a threat as it will signal that the foreign investors are selling SET. Now, we have to wait and see the outcome at this resistance.
The disappearing foreign volume may explain why most big-cap stocks are slowing down. The Bank sector must break out above 472-477 barrier, and the Energy sector must stay above the 22,100-22,180 barrier. The breakout in both sectors will make the SET’s breakout above 1,247-1,250 resistance more promising. While both sectors are in the sideways and the foreign volume is not yet back, we may consider trading in small-cap and mid-cap stocks, particularly Auto, Commerce, and Healthcare, as these sector may yield more impressive return.
Thanks again Ploy!