Vietnam Insight

▶ The market experienced a record-high drop of nearly 95 points at the beginning of the week, with many pillar stocks falling to the floor, causing the VN30 to drop by three digits. With today's decrease, the VN-Index has negated all the gains in October, bringing the market back to the 1,600 - 1,700 range. Selling pressure spread heavily in the afternoon session when many stocks fell sharply and hit the floor. HOSE’s liquidity also skyrocketed to a record high of VND 53 trillion, and foreign investors continued to sell strongly.

▶ At the end of the trading session, the VN-Index recorded a decrease of 94.76 points (-5.47%), closing at 1,636.43 points; the HNX-Index decreased by 13.09 points (-4.74%), reaching 263.02 points. Market liquidity soared to VND 58.8 trillion under strong selling pressure, equivalent to 1.9 billion shares being traded. Foreign investors continued to net sell VND 2,052 billion during the session, with the largest net buying value concentrated in MSN, CTG and STB. 

▶ Technical perspective: The market had a strong correction session of nearly 100 points, losing the psychological threshold of 1,700 points and returning to the previously accumulated price base of 1,600 points. Volume also skyrocketed by 60% compared to the previous session, showing increased selling pressure. Thus, after failing to conquer the 1,800 point milestone, the strong correction phase brought the market back to the nearest support zone of 1,600 points. To be able to return to the uptrend, VN-Index will have to accumulate again to wait for the wave-leading stocks in the coming period.

In the base case: The market continues to move towards the threshold of 1,700 - 1,800 points. Liquidity increases in the same direction as the index, the large amplitude and the spreading green color will reinforce the uptrend of the market.

In the negative case: The market faces selling pressure after breaking through the psychological threshold of 1,700 points. If the 1,600-point mark continues to be 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: In case the market successfully returns to test 1,600 points, investors can disburse funds to focus on groups of stocks with many driving forces such as benefiting from upgrading, strong business growth results; or lower valuation levels compared to the general market.