Vietnam Insight

▶ The market recorded the second consecutive increase after successfully testing the support zone around 1,305 and stepped one foot closer to the previous peak of 1,350. The positive sentiment continued with an Up-GAP from the beginning of the session. Despite selling pressure which caused fluctuations during the session, VN-Index still managed to close with an increase of nearly 10 points, strongly supported by net buying pressure from foreign group. However, liquidity remained lower than the 20-session average, showing investors' caution when the market was approaching the peak level.

▶ At the end of the trading session, VN-Index increased by 9.58 points (+0.72%), reaching 1,347.69 points; HNX-Index increased by 0.12 points (+0.05%), reaching 228.24 points. Market liquidity reached 23.4 trillion VND, which was equivalent to about 1 billion million shares being traded. Foreign investors continued to net buy VND 558 billion, focusing mostly on FPT, HPG and NVL.

▶ Technical perspective: The market recorded a recovery session moving towards testing the peak level. Liquidity fluctuated below the average level, showing that the cash flow was still hesitant as the index approached the previous peak. Sideways is still considered the main trend, and the factor that could lead to a significant change in the trend has not showed itself up yet. 

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

- In the base case: If Vietnam has no new progress on tax agreements, the main trend will still be trading sideways and waiting for a clearer confirmative 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.