SET 50 : Price momentum indicators giving a “sell”, but institutional volume flows yet to confirm

Many people go by their RSI’s and Slow Stochastics, MACD’s and moving averages, and we do look at such indicators. However, when price momentum is not confirmed by volume flows – in this case a breakdown in the institutional volume trend we tend to be cautious in calling a big sell-off, which is where we stand with the SET 50 and indeed the broader market.

It would of course only take a day or two of very heavy foreign selling to confirm an end to the current rally, but for the next day or so there is still hope a retest of recent highs can still be achieved, or at least a bounce before a stronger wave of selling hits the market.

A close below 769-772 on the SET 50 would not be a good sign, and below 746 a stark signal that bad times are ahead. On the other hand all it will take is a rebound and close above 788 to keep bullish momentum on side, and above 795 to spark another go at 800 and beyond.

Friday’s close and flow data will be of much interest, with a net sell of  several billion from foreigners likely to create a selling stampede next week – placing 747 or so as the main support and first significant retracement level.

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