Vietnam Insight

▶ Continuing the upward momentum, VN-Index continued to record a breaking session in excitement with significant contributions from the Securities group and many Bluechip stocks. Improved liquidity indicated that investors’ confidence has improved. Concurrently, foreign investors also reversed to net buy with a relatively large net value.

▶ At the end of the trading session, the VN-Index increased by 10.95 points (+0.82%), reaching 1,347.25 points; HNX-Index increased by 2.77 points (+1.22%), reaching 228.94 points. Market liquidity reached VND 29.01 trillion, which was equivalent to more than 1.3 billion shares being traded. Foreign investors reversed to net buy VND 853 billion, mostly focusing on APG, VND and SHB. On the other hand, FPT, VRE and STB were the three stocks the suffered the strongest selling pressure.

▶ Technical perspective: After returning to test EMA9 at around 1,333 points, VN-Index showed a positive recovery when it increased by nearly 11 points and closed the session just below 1,350 points. Liquidity improved but the price increase slowed down and the spread was small, showing that the market is still quite balanced around this old peak.

- In the positive scenario: The market manages to maintain the EMA50 against short-term profit-taking pressure, supported with positive information from tax negotiations. This will serves as a positive signal to help investors improve their confidence. 

- In the base scenario: Vietnam has no new progress on tax agreements, the main trend would remain trading sideways and waiting for clearer signals from the market.

Strategy: Investors should temporarily stop buying new stocks that have experienced significant increases, because short-term cash flow can take profits and move to stocks that are trading below MA200/MA50. For new buying positions, priority can be given to real estate and banking groups that are moving in low price base with an accumulation base, however, the disbursement ratio should maintain at a low level.