Vietnam Insight

▶ After a sharp declining session commencing the trading week, the market recovered slightly on Tuesday with liquidity remaining at a low level. The market opened with Down-Gap but then quickly recovered thanks to large-cap stocks, although it failed to close at the summit price. Foreign investors reversed to net buy slightly, mainly focusing on Gelex-relating stocks.

▶ At the end of the trading session, the VN-Index increased by 5.66 points (+0.43%), reaching 1,316.23 points; the HNX-Index decreased by 0.09 points (-0.04%), reaching 226.40 points. Market liquidity reached VND20 trillion, which was equivalent to about 882 million shares traded. Foreign investors net bought VND 309 billion, mainly concentrated in EIB, VIX and GEX.

▶ Technical perspective: The market recorded a recovery session after the previous declining one, remaining in the sideways range of 1,290 - 1,340 points. Liquidity continued to decrease to a lower level than average, indicating a correction stemming from lack of support in the context of not too large selling pressure. Sideways is still considered the main trend and there has yet been no significant factor that could sway the market.

- In the positive case: The market manages to maintain the EMA50 when facing of short-term profit-taking pressure from the market, along with positive information from tax negotiations from Vietnam. This will open up a positive signal to help investors confidently disburse in the upcoming time.

- In the base case: Vietnam has no new progress on tax agreements, the main trend will still trade sideways and waiting for a clearer signal from the market.

Strategy: Investors should temporarily stop buying new stocks that have increased a lot, because cash flow can take profits and switch to stocks that are trading below MA200/MA50. For new positions, priority can be given to stocks among the real estate and banking sectors that are in low price ranges, accompanied with tight accumulation bases. However, the disbursement ratio should also be kept low.