Morning Note
2 October 2017 PSR Tactical Portfolio Update Stock Action/Price JMART
IN
Buy @ 16.6
Thailand Equities
Market Outlook: Sideways with downside bias
Rem ark ST target @ 18
Current portfolio holdings* Long
BDMS (21.8), AIT (29.5), WICE (4.8), SVI (5.4), SINGER (14.8)
Short
ORI (17)
*(Short-term target prices) Cash Balance Stocks on cash balance list*: -- Stocks expected to be on cash balance list*: --* If underlying stocks are on the cash balance account, warrants would also be on the list, too.
● Market sell-off becoming visible: The market’s rally over the past one month despite the absence of consensus earnings upgrades pushed the SET index higher to 16.6x forward P/E, which is no longer cheap. The market also began to see more profit-taking in the face of the weakening baht, which could put downward pressure on foreign fund flows into Thai stocks. Meanwhile, US President Donald Trump's tougher response to North Korea would again fuel tensions on the Korean Peninsula. Subdued trading in regional markets: Several stock markets in Asia will be closed on different days due to national holidays for the whole of this week, starting from the China, Hong Kong and India bourses today. As a result, the Thai stock market is expected to be subdued with limited upside potential this week due partly to a lack of support from foreign fund inflows. Under these circumstances, the SET index is likely to move sideways with a downside bias within a range of 1667-1678 points today. Investment strategy: Sell on rises, buy on dips. Upside momentum play: Hold onto AIT. (Note that the portfolio will be reviewed monthly on the 16th day of each month.) Short-term trading play: Hold onto SINGER on bullish technical signals. Hold onto WICE in view of its upbeat earnings trend. Hold onto BDMS as a big-cap laggard play. Hold onto SVI on view that it should benefit from the weakening
baht. Hold onto short ORI in light of its excessive valuations at more than 30x P/E and today look to go long JMART today due to its strong sales showing from Thailand Mobile Expo.
Technical Picks Stock
Rating
Technical View : Short-term pullback, buy into weakness
Support
Resistance
Cut
DEMCO Trading
6.60
6.90, 7.15
6.45
DTAC
Trading
56.25
58.25, 59.25
55.50
MALEE Trading
38.00
40.50, 42.50
37.00 SETI 1,673.16 Change +6.80
Key Factors to Watch
Oct 2: US ISM manufacturing Oct 4: US ADP nonfarm payrolls
Turnover: Bt57,037
Block Trade Corner Trend
Stock
Bull
PTG, AAV, KTC, TASCO, SIRI
Bear
ADVANC, TOP, BJC
PSR Strategy & Technical Teams
The SET index rallied sharply on Fri afternoon but failed to break above 1675 points, providing scope for a pullback toward the sideways channel, in which the index was trapped for two weeks. We advise to buy on dips during intraday pullback. Support levels hold at 1665 and 1660 points respectively (a break below these levels could be seen as a cut loss point for short-term speculation).
Derivatives Strategy Strategy S50Z17
DTACZ17
Trading Range
Look to go short at 1,076 points or above in anticipation of a further downward move towards a profit target of 1,067 points and set a stop at if above 1082 points. Let the profit run on existing long bets which were opened at Bt58.75 to a profit target of Bt58.75. Place a stop below entry point.
1,067-1,078 points
Bt56.00-Bt59.00
Ref No: MF2560_0185 1
