The Thai SET Index continues its upward trend for the sixth consecutive day, reaching 1,438 points yesterday, the highest level since October 18, 2023. The index has increased by approximately 13% from the low of August 5 this year, when it recorded 1,273 points, up to the peak of 1,438 points recorded yesterday. It has also risen by about 1% since the beginning of this year.
Recent Thai economic data demonstrate that the Thai economy is indeed resilient, as follows:
- The export index increased by 15.30% year-over-year in July, exceeding the previous reading of 0.30% and marking the highest level since March 2022.
- The import index rose by 15.80% year-over-year in July, surpassing the previous reading of -0.10% and reaching its highest level since September 2022.
- Gross Domestic Product (GDP) grew by 2.3% year-over-year in the second quarter of this year, exceeding expectations of 2.1% and the previous reading of 1.6%.
- The industrial production index grew by 1.79% year-over-year in July, outperforming expectations of -0.70% and the previous reading of -1.63%.
Notably, two key factors have provided upward momentum for Thai stocks:
- Statements from most Federal Reserve members and Chairman Jerome Powell regarding the initiation of monetary easing, specifically reducing interest rates starting from the September meeting.
- Investment shifts from regional areas such as China due to ongoing economic weakness to other Southeast Asian regions like Thailand.
Technical indicators appear to support the upward trend of the SET Index in the near term for several reasons:
- Firstly, a Golden Cross occurred between the 20-day moving average (gray) and the 50-day moving average (blue) on August 26, 2024, which provides positive momentum for the SET Index.
- Secondly, the Relative Strength Index (RSI) currently registers at 81 points, indicating an overbought condition, reflecting the upward momentum of the SET Index.
- Thirdly, the Positive Directional Indicator (DMI+) is around 47 points compared to the Negative Directional Indicator (DMI-) at approximately 9 points. The significant gap between these indicators suggests strong buying pressure on Thai stocks. Moreover, the Average Directional Index (ADX) is around 36 points, surpassing the 25-point threshold, indicating strong momentum in this upward trend.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
