Vietnam Insight

▶ The index opened the trading session with a gap down of 10.74 points after the previous correction. Foreign investors continued their net selling for the third consecutive session after strong net buying in previous sessions. The market correction occurred when the index reached its historical peak, surpassing the 1,900 mark. During today's trading session, insurance stocks showed positive growth thanks to information related to interest rate adjustments.

▶ At the close of trading, the VN-Index decreased by 29.64 points (-1.56%), to 1,864.80 points; the HNX-Index decreased slightly by 0.16 points (-0.06%), to 253.16 points. Market liquidity during the correction remains above the 20-day average, reaching 44.3 trillion VND, corresponding to 1,415 million shares traded. Foreign investors net sold 809 billion VND, with the largest net selling value in MSN, VCI, and SSI. Contrary, VIC, VCB, and TCX were the stocks with net buying.

▶ Technical perspective: The correction in the VN-Index mainly stemmed from pressure on large-cap stocks related to Vingroup and state-owned enterprises (SOEs), after a period of strong gains. After the trading session ended, the RSI index retreated from the overbought zone; Profit-taking from strong growth stocks concentrated to shift to materials and consumer goods, while capital inflow into real estate remained weak. Overall, the market outlook remains positive as the index continues to trade above the MA50 line, supported by a healthy liquidity structure: increasing during rallies and narrowing during corrections.

Liquidity Trend: We expect the current "money spillover" effect to continue supporting the upward trend of the VN-Index. Maintaining high liquidity is a crucial foundation supporting the overall market's upward trend.

Industry Rotation: We expect a tactical shift in leading sectors. Our view leans towards a scenario where capital withdraws from overheated stock groups and moves into undervalued groups/stocks or those that have completed their accumulation phase.

From a statistical perspective, we track the percentage of stocks trading above their 50-day moving average (EMA50) as an indicator to identify market bottoms. Historically, the VN-Index has typically bottomed out when this percentage fluctuates between 30% and 40%. With the current figure at 40%, the data suggests significant upside potential for most stocks.