Every time the SET Index enters the RSI "red zone" (oversold territory), the long-term outcome has consistently been positive. Historically, the following 8–10 years have delivered strong returns, with some bull markets reaching over 15% annually.
The duration of time spent in this red zone has also been decreasing—21 months during the 1997 crisis, 6 months in 2008, and just 3 months in 2020. Currently, we are 5 months into this oversold zone.
But unlike developed markets, Thailand’s stock market is largely liquidity-driven rather than purely fundamentals-driven. That means prices can often disconnect from actual economic conditions due to capital flows and investor sentiment.
When liquidity dries up, prices fall sharply—but that also creates mispricing and higher information asymmetry, which can lead to alpha opportunities. This is exactly why we need to pay even closer attention now.
The duration of time spent in this red zone has also been decreasing—21 months during the 1997 crisis, 6 months in 2008, and just 3 months in 2020. Currently, we are 5 months into this oversold zone.
But unlike developed markets, Thailand’s stock market is largely liquidity-driven rather than purely fundamentals-driven. That means prices can often disconnect from actual economic conditions due to capital flows and investor sentiment.
When liquidity dries up, prices fall sharply—but that also creates mispricing and higher information asymmetry, which can lead to alpha opportunities. This is exactly why we need to pay even closer attention now.
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