Vietnam Insight

▶ The market started the new week with an impressive increase of nearly 33 points, in which the pillar stock group VN30 was the main driving force when it increased by more than 39 points (+2.42%) with many representatives reaching the ceiling price such as SHB, TPB, VJC and VIC. However, liquidity was not very unanimous when the trading value was only at 32 trillion VND (if excluding the put-through transaction at VIC).

▶ At the end of the trading session, the VN-Index increased by 32.98 points (+2.21%), reaching 1,528.19 points; HNX-Index increased by 3.41 points (+1.29%), reaching 268.34 points. The market liquidity decreased, equivalent to only about 32 trillion VND if excluding the put-through transaction at VIC. Foreign investors net sold 10 trillion VND in the session, in which the value of VIC’s deal accounted for 9.8 trillion VND. In addition, other typical stocks that were net sold were SSI, VHM, FPT.

▶ Technical perspective: The market saw a good recovery of nearly 32 points, with significant contributions from Vingroup and banking stocks. Although VN-Index experienced a wide recovery range and closed at a high level during the day, this recovery session has not been supported by cash flow as the trading value remained low. Foreign cash flow also maintained net-selling position. The next developments around the old peak will determine whether this is a breakout or just a technical recovery. If VN-Index increases with a wide range in points with increasing consensus of liquidity, it is expected to move towards the 1,600 - 1,700 point area. If cash flow does not support (liquidity remains low) and the market shows selling pressure around the old peak, VN-Index is expected to correct to around 1,450 points for re-testing.

- In the positive case: The market is likely to experience corrections before continuing to increase points towards 1,600 - 1,700 points. Adjustments around 1,400 - 1,450 points will be a good opportunity for investors to increase their stock proportions.

- In the negative case: The overwhelming selling pressure could cause VN-Index to lose EMA20 and EMA50 points, along with unfavorable economic information that can push VN-Index back to a sideways state within a wide range. 

Strategy: Investors should limit disbursement in recovery sessions which is accompanied with low liquidity and wait for a clearer confirmation of the uptrend. In technical correction sessions around 1,400 - 1,450 points, investors can consider partial disbursement in stocks with good business results and benefit from market upgrade expectations. In case institutional cash flow does not reappear in the 1,400 - 1,450 point area, investors can reduce the proportion of stocks to manage risks.