SET Index : Weekly target 1058-1062

The SET looks like it should be able to touch 1058-1062 this week, above which we can’t see any serious resistance until 1100 or so. It is unlikely the Index will have the strength to break through 1058-1062 at first or even second attempt, but if institutions (both local and foreign) up the ante a tad, we could well see the SET hit 1100 during early  to mid Q2.

This is not to say a rally to 1100 is a forgone conclusion, but we think the odds are good (70%) given the market’s ability to discount negative news flow of epic proportions and still hold firm.

Recent heavy selling pressure on Euro sovereign bonds due to escalating concern of Portugal is driving capital inflows back into emerging markets, most notable in the vicinity Thailand and Indonesia. Coupled with at least 300bn more QE 2 courtesy of Bernanke, and we should have a final rally for equities then a pretty hefty correction from May-June.

The SET has first support of note at 1028, with a slightly stronger level at 1018-1020. The Index has trend support at 1017 and climbing, and a key technical support at 1009 and of course the 1k mark.




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