Vietnam Insight

▶ The index opened the trading session with a gain of 7.99 points following the recovery from the previous session. Foreign investors continued their net selling trend, reaching their strongest net selling position since the beginning of the year in today's trading session. The index faced selling pressure and corrected as it approached the strong resistance level of 1,900.

▶ At the close of trading, the VN-Index decreased by 2.81 points (-0.15%), to 1,893.78 points; the HNX-Index decreased by 1.84 points (-0.72%), to 253.11 points. Market liquidity during the correction was above the 20-day average, reaching 41.5 trillion VND, corresponding to 1,245 million shares traded. Foreign investors net sold 1,754 billion VND, with the largest net selling value in GMD, VNM, and VCB. Conversely, VPB, KBC, and ACB were the stocks with net buying.

▶ Technical perspective: Technically, the VN-Index continues to fluctuate around its peak within a narrow range, with liquidity remaining at an average level. The RSI is moving around the overbought zone, indicating a potential risk of short-term profit-taking in stocks that have risen sharply recently, while also triggering a shift of capital to other sectors. Nevertheless, the fact that the VN-Index is still trading above the EMA50 indicates that the current market trend remains positive.

Amidst the ongoing 14th National Congress of the Communist Party of Vietnam, market liquidity tends to slow down as investors maintain a cautious and wait-and-see attitude. However, we believe that capital flows will soon improve again after the new leadership is finalized. Historically, previous Party Congresses have shown that when policy directions become clear, market sentiment is usually loosened, thereby creating momentum for a new upward trend.

Notably, the current period is also pivotal as many businesses begin to announce their 2025 profit outlook and reveal growth plans for 2026, thus opening up opportunities for clear differentiation among stock groups.

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 typically confirms a bottom when this percentage fluctuates between 30% and 40%, and peaks around 60-70%. With the current figure above 50%, the data suggests that there is still room for growth for most stocks.