Vietnam Insight

▶ The index continued to recover on Thursday with an increase of more than 8 points, bringing the VN-Index back to 1,687. However, the market differentiation was large, as the momentum was tilted towards the VIN stocks. The VIC-VHM duo alone contributed more than 12 points while the general market only increased by 8 points. Liquidity continued to decrease to an extremely low level, showing that the cash flow is generally on the sidelines and cautiously observing instead of participating strongly. Foreign investors still maintained the net selling momentum with a net selling volume of more than 1,200 billion.

▶ At the end of the trading session, the VN-Index recorded an increase of 8.56 points (+0.56%), closing at 1,687.06 points; the HNX-Index decreased by 1.91 points (-0.71%), reaching 266.78 points. Market liquidity fell sharply below the 20-session average, reaching VND27 trillion, equivalent to just over 863 million shares traded. Foreign investors net sold VND 1,289 billion, of which the largest net selling value was concentrated in CTG, HPG and MSN.

▶ Technical perspective: The market continued to trade in a narrow range when retesting the resistance level of 1,700 points, cautious buying pressure pushed the market back to the support level and closed at 1,687 points. Trading liquidity dropped below the 20-session average and even lower than yesterday, showing that selling pressure was not too great but buying pressure was still weak. To be able to return to the uptrend, VN-Index will have to re-accumulate and wait for the leading stocks to appear. If the market maintains good liquidity and surpasses the 1670-1680 zone, the medium-term recovery trend can be confirmed.

In the base case: The market continues to trade in the 1,600 - 1,700 point zone. Liquidity increases in the same direction as the index, the large amplitude and the spreading green color will strengthen the opportunity for the market to return to the uptrend.

In the negative case: If the 1,600 point mark continues to be broken, the market is likely to retest the 1,500 - 1,550 point area (this is also the old peak of the market in 2022).

Strategy: Short-term investors should temporarily not buy and instead wait for the market to form a price base. In case the market successfully returns to test 1,600 points, investors can disburse for medium and long-term positions, focusing on groups of stocks with many driving forces such as benefiting from upgrading, strong business growth results; or lower valuation levels.