Vietnam Insight

▶The market experienced relatively positive motivation in the morning, but selling pressure gradually increased towards the end of the session, causing the index to retreat and only managed to close around the reference price. The brokerage sector surged by the session’s end, market liquidity increased and foreign investors went on with their net selling streak, with selling pressure concentrated on large-cap stocks in the VN30 group.

▶ At the end of the trading session, the VN-Index increased by 0.5 points (+0.04%), reaching 1,317.83 points; HNX-Index increased by 1.72 points (+0.73%), reaching 238.13 points. Market liquidity increased to VND 20.59 trillion, which was equivalent to about 939.57 million shares being traded. Foreign investors increased their net selling to VND 709 billion on HOSE, mainly focusing on TPB, VNM and GMD.

▶ Technical perspective: Following up on the recovery momentum from yesterday, the market opened a gap up in today morning, however, profit-taking pressure gradually appeared towards the end of the session. Trading liquidity increased and VN-Index failed to test the 1,325 points trend line, which was indicative that selling pressure was relatively strong at the resistance level. Currently, the 1,300 points zone plays as an important support for VN-Index. For the market to continue to recover, a return of cash flow must be observable in the upcoming sessions.

In the negative scenario (low probability), profit-taking pressure would turn strong and break the important support zone of 1,300 points. As far as we are concerned, this support zone plays a key role in the continuation of the uptrend, as it is the support level on both the Daily chart and the Weekly chart. A drastic decline could negatively impact market sentiment.

Strategy: The market has shown positive signals, breaking the sideways trading channel. VN-Index is likely to maintain the uptrend towards 1,350 points. Investors can increase their stock proportions in decreasing sessions featuring average liquidity and small spreads. In the negative case, if the index fails to uphold the 1,280 - 1,300 points, investors can reduce stock proportions to manage portfolio risk.