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Thai Stock Market Analysis May 9, 2022: How Much Lower Will the the SET fall?

Thai Stockmarket Trading Session May 09, 2022

Ugly Trading Session Leaves Thai Stock Market Index in Murky Waters

The Thai stock market had recently done remarkably well in light of the economic bruises inflicted by the handling of the pandemic, rising inflation, geopolitical tensions and global economic slowdown.

But after the SET’s shedding of another 1.54% today in a session which closed at the low of the day, – generally expressing bearish sentiment, the Thai market appears to have finally joined the sell-off in many equity markets around the globe.

Technical Reading of the SET Index in May

Most of April, the 10-Day, 50-Day, and 200-Day Moving Averages (in purple, yellow and green in the above daily chart of the SET, were perfectly stacked upon each other.  The major Moving Averages aligned in such a way is the hallmark of an upward trending market, a rarity in global stock market indices these days.

Then on April 22 the 10 Day Moving Average crossed through the 50-Day Moving Average, signaling short-term bearishness.

And while the SET was sitting right on the 50-Day Moving Average for a couple of days after successfully testing and bouncing the 50-Day in the week before,  it then headed South.

And the SET headed South at an accelerates pace, last Friday gapping below the 200-Day Moving Average and loosing even further ground today in a deep red session.

The major Thai equity index now stands at 1604, the lowest closing date in 2022 so far.

And that very little bottom fishing buyers or institutions stepped in at this level, may indicate that the SET could correct further before resolving to the upside again.

Few Places Remain to Hide

While the sell-off was broad-based today and large caps mostly retreated, there are places to hide and even grow you account.

PSL added 4.28% and BJC netted 2.17. Several smaller names like TKT, CMAN, TRC, CHOW and TMI popped more than 10%.

So, as in any market, there are opportunities. But this certainly is a market for the active and nimble trader.

So What’s Next for the Thai Stock Market?

So, from a viewpoint of technical chart analysis, the SET looks vulnerable to further downside.  This seems likely as other major indices are selling off heavily with US markets  reaching a 2022 low.

Next resistance for the SET is  around 1590, the prior low back in December 2021. If this level gets taken out, we could see much lower lows.

But it’s best to keep an open mind and to remember that the stock market is the great humiliator. And as such, it is made to surprise us and test our nerves to the fullest.

So, a short term bounce is quite possible as many equities appear oversold. Because if the the SET does move lower, it would mean a trend reversal for the Thai index and could lead to much lower valuations.

 

 

 

 

 

Joe Miller
the authorJoe Miller
I have been living in Thailand for over 20 years and witnessed the many changes the country has undergone since the Asian Financial Crisis. I have spent time in Phuket, Samui, Hua Hin, and Chiang Mai, but I gravitate back to Bangkok when all is said and done. It is here that I spent years running a software development company and teaching at universities. These days I live on the Internet with Bangkok as my base. I never stopped believing in the enormous potential of Thailand's kingdom, which is why I joined the ThaiVest Team.

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