Maybank Kim Eng: Daily Strategy for Investors on March 8, 2019

Maybank Kim Eng Securities has made an analysis of the trading session of March 7, 2019, stating that SET swung in a narrow range, driven by strong buying pressure on retail such as BJC, CPALL, and mid caps like TKN, BEAUTY, CBG and PTG. The index closed at 1,633.2 points (+7.7 points) with a trading value of THB 38 billion, down from THB 44 billion the previous day.
Foreign investors continued to net sell Thai shares for the 9th  day by THB 569 million while institution continued to net buy by THB 355 million. There were net long on SET50 index future by 13,024 contracts.

 

Big Issues
1) The Constitutional Court dissolved Thai Raksa Chart party
2) European Central Bank (ECB) cut EU’s GDP growth to 1.1% from 1.7%
3) Dollar strengthens to 97.6

 

Investment Theme
The SET in March should swing in a range of 1620-1680 points +/-. The market is expected a high volatility in March due to political factors both domestic and global. Maybank recommends to hold cash no less than 40% and focus on power plant (EGCO) mass transit (BEM), tourism (SPA), retail (CPALL) and PTTEP which are global play stocks.

 

Technical View
The SET index experienced high volatility especially in the afternoon session. It managed to close above the short term resistance at 1630 points, driven by buying pressure on the energy, retail and banking sectors. Given the index holding above 1630 points, together with a positive signal in the modified stochastic indicator, it is likely the index to regain in a short term. The major trend, Maybank sees that it only swings in a sideways channel in a range of 1630-1660 points. So, if it rebounds, it is a chance to sell stocks to reduce portfolio at resistance.

 

Investment Strategy
1) Investors with stocks, if SET rebounds, take profit at resistance for cyclical trading. And if the index dips below 1625 points, take profit or stop loss.
2) Without stocks, if SET weakens but holds above 1625-1630, speculative buy stocks for a brief rebound trading.

 

Maybank sets a support line at 1615 points and 1625 points, while setting a resistance line at  1645 points and 1660 points.

Keep an eye on
1) Trump to meet Xi Jinping on trade war talks on March 27.