Vietnam Insight

▶ VN-Index continued its upward momentum in Tuesday's trading session, with major driving forces lying in pillar stocks such as VIC, TCB, SAB, or VJC... Market divergence was narrowed with the number of advancing and declining stocks being relatively equal, while positive sentiment also spread across more industry groups. Foreign investors posted strong net buying as net buying value recorded a sharp increase to nearly 640 billion. Liquidity improved slightly compared to yesterday's session; however, the current liquidity base remains quite low, showing the caution of investors in the context of a rising index. 

▶ Ending the trading session, the VN-Index recorded an increase of 15.39 points (+0.9%), closing at 1,717.06 points; HNX-Index increased slightly by 0.96 points (+0.37%), reaching 258.87 points. Market-wide liquidity was quite dismal, reaching only 24 trillion VND, corresponding to just over 790 million shares traded. Foreign investors net bought with a net value of 636 billion VND, in which the stocks net bought the strongest were VJC, VIC, and TCB. On the opposite side, typical net selling included ACB, VIX, and PDR... 

▶ Technical perspective: Foreign investors returning to net buying with improved market breadth is showing positive signs for the uptrend prospect of the VN-Index in the coming time. This development is relatively consistent with our base case, with the expectation of cash flow spreading after the large-cap group (VIC, VHM, VJC..) leads the market wave. The VN-Index is trading at the upper limit of the sideway zone of 1,600 - 1,700. To be able to break out of this zone, we believe that the upward liquidity trend along with the spreading cash flow needs to continue in the coming time. The market's RSI is moving towards the overbought zone, currently at 64.

In the base case: The market is showing signs of balance in the 1,600 point zone, with liquidity declining sharply across the market and institutional cash flow starting to spread to industry groups with good growth prospects. We believe that VN-Index will trade in a sideways trend (1,600 - 1,700) for the rest of 2025, and the cash flow is expected to be stronger after the Party Congress in early 2026.

In the negative case: The downtrend continues to increase with trading volume gradually increasing in a downward direction, and there is no bottom-fishing force around the threshold of 1,550 - 1,580 points. The market may then continue to move towards the support zone of 1,500 and lower price zones for testing.

Strategy: Investors following the trading school can observe the market reaction around the 1,650 - 1,700 area. If the correction sessions do not cause the index to fall out of the sideways channel, this could be a good opportunity for investors following this school to disburse again. Investors following the medium and long-term investment school can start to disburse part of their investment in groups of stocks with good business results and attractive enough discounts such as banking, finance, construction materials, etc. Based on historical data, the number of stocks traded on MA50 around 30-40% often shows that this is the bottom of the market, currently this index is at (39% - implying that many stocks have deep discounts).