Vietnam Insight

U.S. retail sales are much weaker than expected. The three major averages in the US were little changed on Friday, as traders digest much weaker-than-expected retail sales that raised concerns about the strength of the US consumer spending. Retail sales declined 0.9% last month and the control sales which is used to calculate GDP declined 0.8%. Consumer spending was likely hit by harsh weather and wildfires in LA. Meanwhile, President Trump signed a directive instructing the US Trade Representative and Commerce Secretary to propose new country-specific tariffs. Investors await further details and remain hopeful that negotiations could avert the levies.

Accumulation and cash flow rotation trend. VNINDEX closed at 1,276.08 (+5.73 points, +0.45%) with higher liquidity than the 20-session average. Blue-chip stocks lost momentum towards the end of the session, but trading remained active in the small and mid-cap stock group. In the short-term trend, the market had a session that increased to the resistance level of 1,280 but failed the test. The current short-term sideways range will play the role of absorbing selling pressure around the 1275 - 1280 resistance zone before the cash flow factor confirms a positive return.

Trading Strategy: The market is currently trending towards a sideways trading pattern. For short-term trading, investors can consider deploying capital around the 1,240-point range and gradually take profits as it approaches 1,280-1,300 points. With a buy-and-hold strategy, investors can deploy additional capital when the VN-Index breaks out of and successfully defends the 1,300-point zone.