SET Index : 980 unlikely to hold for long
February 23, 2011 Leave a comment
As noted in our SET Index comment after close Tuesday, if we play out a bad news from Libya scenario, which we gave a 75% chance of playing out overnight, chances are the cute little spinning top on the SET day chart will end in a pullback to between 965 and 970.
Many local analysts are calling 980 as the low point for today, and indeed this level will surely be hit easily. We are less confident, and we expect the Libyan issues to escalate further today. The country is in total chaos, and given Gaddafi is as mad as March hare, chances are he will order his foreign mercenaries to kill as many locals as possible. This, in our view will see NYMEX crude pop the ton before the end of the week.
For today, hold off. We see little point in trading just yet, so even though bargains may well be on offer, the latter part of the week should see even greater bargains.