Vietnam Insight

▶ The market expressed positive reactions to the results of the basic tariff negotiations between the US and China on Thursday session. VN-Index opened with a GAP-up and remained above the reference level throughout the day. Liquidity increased compared to yesterday and approached the 20-session average. Meanwhile, foreign investors also recorded a positive net-buying session. Contrary to the general trend, the trio that introduced the most negative impact on the market index  belonged to the Vingroup – VIC, VHM and VRE.

▶ At the end of the trading session, the VN-Index increased by 7.79 points (+0.59%), reaching 1,322.99 points; HNX-Index increased by 1.5 points (+0.66%), reaching 227.73 points. The liquidity of the whole market increased to VND 21.8 trillion, which was equivalent to about 982 million shares traded. Foreign investors net bought VND 448 billion, mostly concentrated in HPG, DGW and MWG.

▶ Technical perspective: The market recorded a recovery session back to EMA20, the movement state remained within the sideway range of 1,290 - 1,340 points. Liquidity recovered to the average level, showing the return of cash flow, which is considered a positive signal for the market. Sideways is still considered as the main trend of the market, and the factor that could lead to a significant change in the trend has not showed itself up yet. 

- 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.