SET Index : 978-980 or 959 – follow the US markets Wednesday.

With 2 days of solid foreign buying many will be hoping this is the positive sign needed to turn the SET around and allow it to play catch up with the recent stars on the leader board – the US, Germany and Japan.

In our view a reversal could occur, but will need far greater volume – at least a 20% increase from the current 100 day average volume of THB 35bn. If we get a couple of days of 40bn+ then the 980 level can indeed be cleared, but for 990-1010 to be surpassed it will take a good week if strong buying and an end on the Cambodian border issues, and even better, a trip home for the yellow shirted mob.

The day chart does however open up the possibility of another correction, which will be very likely should the US markets pullback a tad overnight – which looks more likely for the Feb 15th session than it has done for a number of days.

For us 959 is the key VST support for the SET, with a daily close below here not a good sign for the latter part of the week.

In summary, a pullback in US stocks should see the SET correct to 959 or so, with lower support back at 950. If however the likes of the Dow rally yet again the SET should test 978-980.


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