Vietnam Insight

▶ Ahead of FTSE's official announcement of market reclassification, the stock market traded cautiously on Tuesday. Although it opened with an 8-point increase, the VN-Index was unable to maintain green color until the end of the session under slight correction pressure from stocks after a strong increase of yesterday. As a result, the VN-Index closed down 10 points, with relatively low trading volume.

▶ At the end of the session, the VN-Index fell 10.2 points (-0.6%), reaching 1,685.30 points; the HNX-Index fell 1.82 points (-0.66%), reaching 272.87 points. Market liquidity fell to VND 28.5 trillion, equivalent to 1.02 billion shares traded. Foreign investors continued to net sell with a volume of VND 1,340 billion on the HOSE, in which the largest net selling value belonged to STB, VRE and VHM. On the contrary, HPG, FPT, GEX... were the typical net buying stocks, with the net buying value at HPG alone accounting for VND 257 billion.

▶ Technical perspective: After a strong increase due to rumors of an market upgrade, the VN-Index experienced a relatively quiet session with low liquidity. The market's movements are relatively typical while awaiting important news. Despite the strong increase in the previous session, the VN-Index is still trading sideways at 1,600 - 1,700 points. The upgrade result tomorrow morning (if an upgrade is possible) could help attract new cash flow into the market, helping the VN-Index surpass its old peak around 1,700 points. However, even if the good news is passed, liquidity must show an improvement in the upward direction to reinforce the continued upward trend of the VN-Index.

In the positive case: Rumors about the market upgrade can help attract new cash flow and move towards 1,750 - 1,800 points. Cash flow increases in the upward direction and large amplitude will strengthen the market's uptrend.

In the negative case: The market faces profit-taking pressure when the upgrade news is announced, the amplitude of the down sessions is large and breaks the short-term support zone of 1,600 points. If this level is broken, the market is likely to retest the 1,500 - 1,550 point area (this is also the old peak area in 2022). 

Strategy: Prioritize the holding strategy and being ready to sell when the target is reached. For short-term traders, if the market corrects to around 1,600 points and rebounds, it is possible to consider disbursing a low proportion. If the market returns to the 1,540 point area, there will be a clearer buying opportunity for medium-term positions. Investors can disburse more strongly, focusing on stock groups with many driving forces such as benefiting from market upgrading, strong business growth results; or lower valuation levels compared to the general market.