Daily Strategy for Investors on December 21, 2020

Maybank Kim Eng (Maybank) released an analysis for the trading session on December 21, 2020, indicating the essential events in the stock market as follows: 

Market Summary

The SET on Friday gained in the morning and then weakened in the afternoon driven by selling pressure. The SET index closed at 1,482.38 (-1.51 pts) with a trading value of TH117b (THB113b previous day). 

Foreign investors net sold Thai shares by THB5.61b. Institutional investors net sold by THB3.637b. There were net Long on SET50 Index Futures by 1,813 contracts.

Investment Theme

New wave of Covid-19 in Thailand: The risk of a new Covid-19 epidemic in Thailand increases. There were 694 more infected cases reported over the weekend, most of which were related to shrimp market owners in Samut Sakhon Province. As a result, the provincial lock-down began until January 3. 

And if considering the current situation of the Thai stock market, it was found that it was in a fragile point since 1) the SET rose up to 287.43 points or 24.05% since the end of Oct. 2) Previously, the institutional investors who had SET / SET50 as the benchmark index bought stocks on a benchmarking basis, adjusting portfolios according to foreign fund flow, which pushed the index upward strongly to make gain return that outperform the market. 

So there is a high chance to see risk-off selling pressure that may depress the Thai stock market in the short term, in the next few days, responding to this issue which is considered as a Negative Surprise. This also is a period of proactive testing for people at risk that although it is a group with no symptoms and low chance of transmission, a large group of people, so there may be an increase in infected cases continuously.

Investment Strategy

Today Maybank expects the SET to fluctuate, estimate support 1,460 and resistance 1,485. Focus on stocks with limited direct negative impacts, or benefit from this issue. ATO Picks today, recommends “SINGER, TQM and STGT“

With Stocks: Hold stocks to run trends until the index weakens and dips through 1460 pts.

Without stocks: Trading buy with momentum. Wait to take profit at resistance 1492/1500 pts.