Wednesday, July 22, 2009

Thai Stock Rally ‘Just Beginning,’ KGI Says: Technical Analysis

By Anuchit Nguyen

July 22 (Bloomberg) -- Thailand’s benchmark stock index may advance a further 8 percent by the end of August, according to a trading momentum chart that shows the rally is “just the beginning,” KGI Securities (Thailand) Pclsaid.

The SET Index may rise to 660 after the Moving Average Convergence-Divergence oscillator this week rose above the so- called signal line, saidAdisak Kammool, a Bangkok-based analyst at KGI. The relative strength index at about 60 also indicates more room for the gauge to rally, he said.

“The MACD crossover signals the recent rally may be just the beginning,” Adisak said in a telephone interview. “The RSI is still below the selling territory, while daily stock trading volume of more than 20 billion baht demonstrates strong demand among investors.”

The SET Index, which has gained 37 percent this year, rose 0.8 percent to 614.95 as of 10:03 a.m. local time.

Daily trading turnover on the Stock Exchange of Thailand surged 31 percent this week to an average 22 billion baht ($647 million), from 16.8 billion baht last week, according to the Stock Exchange of Thailand’s data.

Technical buyers usually step in when the MACD rises above its signal line, a so-called bullish crossover. MACD charts can indicate whether a price shift is a change in trend or a short- term deviation, by comparing moving averages based on nine-, 12- and 26-day periods.

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.

To contact the reporter on this story: Anuchit Nguyen in Bangkok atanguyen@bloomberg.net

Last Updated: July 21, 2009 23:18 EDT

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