Vietnam Insight

▶ Following a prolonged decline from the peak of 1,900, the market temporarily stopped falling ahead of the long holiday, while liquidity also contracted to record lows. The VN-Index traded nearly flat with divergence among stock groups. Many real estate stocks that were previously hit by heavy selling trended upward, typically NLG and KDH. Several large-cap stocks such as VIC, FPT, or MWG also had positive sessions, contributing to supporting the index. Foreign investors narrowed their net selling momentum, with the net selling value recorded at only VND 252 billion, a sharp decrease compared to the average in the recent period.

▶ At the end of the trading session, the VN-Index decreased by 0.67 points (-0.04%), closing at 1,754.82 points; the HNX-Index decreased by 0.27 points (-0.11%), reaching 256.01 points. Total market liquidity dropped sharply to only VND 21 trillion, corresponding to over 796 million shares traded. Foreign investors net sold VND 252 billion, in which prominent net selling values were recorded in VCB (-VND 166 billion), VIC (-VND 125 billion), and HPG (-VND 115 billion). On the other side, typical net buying included MBB (VND 198 billion), DCM (VND 114 billion), and GEL (VND 75 billion).

▶ Technical perspective: The VN-Index traded gloomily; selling pressure was exhausted with liquidity 50% lower than the average of the last 20 sessions as the Tet holiday approached. The index continued to weaken as it moved below short-term MA lines, and the MACD indicator maintained a negative signal. The RSI entering the oversold zone suggests that a technical recovery breath might appear in the short term. The VN-Index is currently fluctuating at the lower boundary of the upward price channel. This correction is necessary for the market to re-accumulate its price base, creating a premise for a sustainable uptrend in the near future.

From a statistical perspective, we monitor the percentage of stocks trading above the 50-day exponential moving average (EMA50) as an indicator to identify market bottoms. Historically, the VN-Index usually confirms a bottom when this ratio fluctuates between 30% and 40% and peaks around 60-70%. With the current figure at around 40-45%, the data shows that growth potential remains for the majority of stocks.

In the base scenario: After surpassing 1,800, the market is now retesting the upper boundary of the sideways range (around 1,720-1,780). For the uptrend to continue, we expect buying pressure to appear around this area, helping the VN-Index return to an upward trend with improved liquidity and positive market breadth.

In the downside scenario: If the VN-Index continues to fall sharply and loses the previously established sideways price channel of 1,600-1,700, investors may consider reducing their holdings to manage portfolio risk.

Strategy: Corrective sessions present opportunities for investors to increase their positions. We recommend focusing on stocks with solid business results and positive growth prospects for 2026 that have not yet seen corresponding price appreciation, such as private commercial banks, retail, securities, and steel. Stocks showing positive growth potential, such as state-owned banks and industrial real estate stocks, require selective evaluation, and buying at these price levels should be avoided.