Vietnam Insight

▶ Welcoming the exciting news of the official upgrade from FTSE Russell, the stock market closed the trading session on Wednesday with an increase of more than 12 points, getting closer to the old peak as well as the important psychological resistance around 1,700. Opening with a gap up, the index was under profit-taking pressure from certain investors who realized profits when the rumor turned into reality, causing the index to retest the 1,680 threshold and finally form long-leg candle at the end of the session, showing the participation of relatively good demand. Foreigners' net buying reversal was also a driving force contributing to supporting the index's increase today.

▶ At the end of the trading session, the VN-Index recorded an increase of 12.53 points (+0.74%), reaching 1,697.83 points; the HNX-Index increased slightly by 0.47 points (+0.17%), reaching 273.34 points. Market liquidity improved to VND 36.4 trillion, equivalent to 1.2 billion shares traded. It is worth noting that foreign investors reversed to net buy VND 218 billion during the session, the largest net buying value concentrated in stocks such as GEX, MWG, HPG, VCB... On the other hand, SHB, VRE and MSN were the stocks that this group sold the most.

▶ Technical perspective: Welcoming the good news of the official upgrade from FTSE Russell, the stock market closed the Wednesday session with an increase of more than 12 points, getting closer to the old peak as well as the important psychological resistance around 1,700. Opening with a gap up, the index was under profit-taking pressure from certain investors who realized profits when the rumor turned into reality, causing the index to retest the 1,680 threshold and finally formed a long-leg candle, with liquidity improving but still at a low level. Overall, the index has not yet escaped the sideway zone of 1,600 - 1,700 points. It is necessary to monitor the improvement in liquidity along with the index's breakout from the tug-of-war zone to confirm the continued uptrend of the VN-Index. 

In the positive case: The market upgrade information can help support sentiment and attract new cash flow and help index move towards 1,750 - 1,800 points. Increased liquidity in the same direction as the index will reinforce the uptrend of the market.

In the negative case: The market faces profit-taking pressure after the upgrade news is announced, the amplitude of the falling 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 zone (this is also the old peak of the market in 2022).

Strategy: Prioritize the holding strategy and be ready to sell when the target is reached. In the positive case, VN-Index successfully tests and maintains 1,700, investors can increase the proportion for the upcoming uptrend. In case of not successfully breaking through 1,700, the market returns to the 1,500-1,540 point range, there will be a clearer buying opportunity for medium-term positions, investors can disburse more strongly, focusing on groups of stocks with many driving forces such as benefiting from upgrading, strong business growth results; or lower valuation levels.