Vietnam Insight

▶ VN-Index had a positive trading session after a strong correction from the peak, bringing the index out of the resistance zone around 1,600. The increase spread quite well, especially in the VN30 pillar stocks with a gain of more than 50 points. The market had 268 increasing stocks and 58 decreasing stocks. However, liquidity has not improved as the trading value was still lower than the 20-session average. Foreign investors narrowed the scale of net selling with a value of 381 billion VND.

▶ At the end of the trading session, the VN-Index recorded an increase of 38.25 points (+2.4%), closing at 1,631.86 points; HNX-Index increased 3.71 points (+1.12%), reaching 264.79 points. Liquidity of the whole market remained flat at a low level, reaching 24 trillion VND, equivalent to just over 850 million shares traded. Foreign investors narrowed their selling momentum with a net value of VND381 billion, in which the largest selling value was concentrated in VCI, HDB and VIX.

▶ Technical perspective: After slowing down around 1,580 points, the VN-Index had a positive recovery session with an increase of more than 38 points today. The index has surpassed the resistance of 1,600 with strong support from the VN30 pillar stocks. Although the score increased, the market still lacked consensus from cash flow. Liquidity remained low, below the 20-session average, showing the caution of buyers when not disbursing strongly. We believe that the market has entered a short-term recovery phase, with the immediate recovery target possibly being the 1,700 zone. However, there needs to be an improvement in cash flow as well as a positive change in momentum indicators to confirm a trend reversal.

Strategy:

Investors following the trading style should limit transactions, waiting for the market to show signs of a return of demand. Investors following the medium and long-term investment style can start to disburse part of the investment in groups of stocks with good business results and attractive enough discounts such as banking, finance, construction materials, etc.