Consider taking profits as volatility rises

The SET Index was volatile in October, fluctuating between 1,432 and 1,506 points. After a pullback in the first week of the month, the index found support at 1,430 and subsequently rebounded, even reaching a one-year high of 1,506.
However, a subsequent sharp decline of 63 points tested the 10-week moving average, bringing the index to 1,443. Among the factors expected to influence the market in November:
Fed meeting: The Federal Open Market Committee on Wednesday is expected to announce a 25-basis-points interest rate cut to a range of 4.50%-4.75%, following September’s reduction of 50bps.
US presidential election: The outcome of the election, especially if the results are delayed or disputed, could lead to volatility in global risky assets. Both the Democrat and Republican parties are targeting China, which would benefit industrial estate stocks as more investors could shift production from China to Thailand and Asean. However, a victory by Donald Trump and his more extreme trade protectionism might accelerate US inflation in the medium to long term, potentially impacting future Fed rate decisions.
China economic stimulus: Following a 10% surge after Beijing announced a major economic stimulus package in September, the Shanghai-Shenzhen CSI 300 Index has pulled back. Market participants eagerly await this week’s meeting of the Standing Committee of the National People’s Congress, the country’s top legislative body, anticipating additional stimulus announcements.
Geopolitical conflict: While the Israel-Hezbollah conflict in Lebanon has escalated, it is not clear if Iran plans to retaliate against Israel for the Oct 26 strikes that took out Iranian military facilities. This geopolitical instability is affecting market sentiment and poses a significant downside risk to investment.
The SET Index is expected to continue fluctuating significantly in November. A break above the 1,470 resistance could pave the way for further upside, with targets at 1,500 and 1,535. Conversely, a failure to breach the 1,470 level may trigger a correction towards the 1,430 support level.
Given the potential market volatility, we recommend taking profits on stocks that have experienced significant gains. Additionally, investors should closely monitor the upcoming third-quarter earnings season. Our stock picks for November: