Vietnam Insight

▶ In contrast to the developments in the stock markets worldwide, VN-Index commenced the trading week with an increasing session. The index increased since the beginning of the session and recorded remarkable gains in the afternoon session with consensus from many industry sectorss. Strong net buying by foreign investors was also a factor supporting the market's growth today.

▶ At the end of the trading session, VN-Index increased by 22.62 points (+1.72%), reaching 1338.11 points; HNX-Index increased by 3.3 points (+1.47%), reaching 228.12 points. Market liquidity reached 23.22 trillion VND, which was equivalent to about 971 million shares traded. Foreign investors net bought strongly 985 billion VND, mostly concentrated in FPT, VPB and HPG.

▶ Technical perspective: The market recorded a recovery session above the EMA20 line featuring a strong move towards testing the peak area. 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 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.