Daily Strategy for Investors on October 11, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on October 11, 2019, pointing out some of the must-know events in the equity market as follows:

 

Investment Ideas:

1) The US-China trade negotiation on first day went smoothly. Trump prepares to meet with 2) The Fed plans to increase its balance sheet by buying Treasury securities to keep interest rate low and use a relax monetary policy to relax which is to expand QE to allow sluggish commodity stocks in accordance with the economy to become active again.

3) GPSC, a share from the capital increase, will start trading today with the increased number of shares from 1,498 million shares to 2,820 million shares.

4) AWC will be used to calculate SET50 and SET100 on 16 October 2019.

5) Today’s index range is expected to be 1,605-1,620 points. Today’s recommended stocks are PSL, CKP, KTC.

 

Stock & Comment

PSL – TP ฿13.00/share

CKP – TP ฿7.60/share

KTC – TP ฿52.00/share

 

Pick of the day: PSL (BUY; AWS TP Bt13.00)

Expect PSL to benefit from (1) Baltic Dry Index (BDI) that has revised up to the latest level above 1,900 points (2) Frist day of the US-China trade negotiation went smoothly. They prepare to meet Chinese Vice-President today (3) It is likely that to be an imposition of import tariff on Chinese goods at the amount of USD250bn from the original 25% to 30% on 15 October and the imposition of tariff at the rate of 15% for the amount of USD160bn on 15 December may be postponed until trade negotiation will reach a conclusion. (4) The Fed will increase its balance sheet by buying Treasury securities to keep interest rate low and use a relax monetary policy which is to expand QE to allow sluggish commodity stocks in accordance with the economy to become active again. (5) Supply of bulk carriers is expected to decline according to the implementation of IMO2020 measures. We expect PSL’s breakeven point to be at 1,400 points of BDI and above. The 2H19 average is significantly better than in the 1H19

PSL is likely to be in the uptrend from the occurrence of both Daily & Monthly Buy Signal. If today, which is a weekly market, it could successfully close above Bt8.90, it will resume a new Weekly Buy Signal and will move to the full uptrend with the first target of Bt10.70 and the next target of Bt14.40. The short-term stop loss points is at Bt8.10 (Resistance: 8.85, 8.95, 9.05; Support: 8.70, 8.60, 8.50).