Daily Strategy for Investors on May 14, 2019

Maybank Kim Eng Securities has made an analysis for the trading session on May 14, 2019, stating the SET on Monday saw a selloff pressure alongside the regional markets. Selling pressure was seen on the global play stocks led by PTTGC, BANPU, SGP, TOP and IVL.  
The index closed at 1,640.1 points (-8.5 points) with a trading value of THB 40 billion, (THB 49 billion the previous day).Foreign investors net sold Thai shares by THB 703 million, institutional investors net sold by THB 1.8 billion. There were net Short on SET50 index future by 1,214 contracts.   

Investment Theme: China hits back in trade war with US, equity markets to face selloff in near term
China has said it will impose tariffs on USD 60 billion of US goods from 1 June, extending a bilateral trade war. The move comes three days after the US more than doubled tariffs on USD200b of Chinese imports. The escalation thrust the world’s two largest economies back into confrontation. This situation is in line with our previous forecast of case scenario 1 saying that the equity markets may face riskoff. Maybank suggests investors wait and see
1) US readies to hit back with raising limits of products to USD 320 billion,
2) both nations cancel the 12th trade talks.
However, China’s retaliation symbolised its firm stance emphasising that there are some issues it cannot agree with the US, throughout 11 previous meetings. So Maybank believes that in the short term, the risky assets market like stock market may face a selloff. The SET is forecast to swing down to trade in a range of (AVG-0.5 SD) 1,565-1655 points from (0.5-1SD) until the issue has a clarity. Initially, investors should look into the currency movement in the emerging market, especially USD/CNY, which was attacked by US president Trump. So, if CNY significantly weakens to 6.9-7.0, it will negatively affect the stock markets in Asean, including SET. For domestic factor, Thai politics is getting clearer following 11 parties announced their support of the Palang Pracharat party. The Democrat party will select its leader on May 15, Anutin will announce his stance on May 20. Investment theme: For low-risk takers, halt your investment and wait for clarity of the next trade talks. For high-risk takers, use support 1600/20 points strategy, take profit when index gains/cut loss. Focus on global play stocks.   

Big Issue

USD/CNY surged to 6.87.

Stock Pick & Trading Idea
1) The US-China trade war was escalated while the global stocks markets including SET lacking of catalysts. Low risk takers should halt your investment to wait and see the clarity of the next round of trade talks and/or wait for the relax signal on Q.T from FED.
2) For high-risk takers, TRADING BUY defensive stocks that see limited impact from the trade war and /or earnings continue growing led by BEM (support THB 10.80) PTTEP (support THB127.50).

Technical View
Likely to move sideways, if dips below 1620, double top will be confirmed:  The index continued sliding after failing to hold above 1655, the uptrend line and EMA200Day. The MACD indicator crossed the signal line down to negative territory. The sub-support level should be at 1634 and the key support is 1620. If the index falls through this level, the candlestick will form a double top pattern and switch to downtrend. But if it manages to hold above it, the trend will remain sideways that moves in a range of 1620-1655.

Investment strategy
1) Investors with stocks, use 1634 as a cut loss, if it holds, wait for a rebound trading.
2) Without stocks, if weakens to test supports 1620, buy stocks for a brief rebound trading.

 Maybank sets a support line at 1634 points and 1620 points while setting a resistance line at 1645 points and 1655 points

Keep An Eye On
The Democrat party to select leader and committees.