Vietnam Insight

▶ The index opened the trading session with a 2.04-point gap up after the strong gains of the previous session. Securities stocks received strong capital inflows today due to expectations that Vietnam will launch cryptocurrency trading. Foreign investors continued to heavily net sell FPT shares in the first two trading sessions of the week due to concerns about a global tech bubble.

▶ At the close of trading, the VN-Index increased by 7.48 points (+0.40%), reaching 1,867.62 points; the HNX-Index increased slightly by 0.89 points (+0.34%), reaching 262.72 points. Market liquidity increased sharply, exceeding the 20-day average, reaching VND 34.9 trillion, corresponding to 1,113 million shares traded. Foreign investors net bought VND 319 billion today, with the largest net purchases in HPG, DGC, and BSR. Conversely, FPT, VCB, and VRE were typical net selling stocks.

▶ Technical perspective: The VN-Index traded sideways, closing higher with significantly improved liquidity. Given the index's high price range, increased liquidity is a positive sign, reflecting potential demand to support and push prices higher. The short-term trend is leaning towards positive as technical indicators are improving. The VN-Index is trading above the MA10 and MA20 lines, and the MACD remains above the signal line. If the market trend continues to strengthen along with continuously increasing liquidity, the VN-Index will open up clearer room for recovery.

From a statistical perspective, we monitor the percentage of stocks trading above the 50-day moving average (EMA50) as an indicator to identify the market bottom. Historically, the VN-Index usually confirms a bottom when this percentage fluctuates between 30% and 40% and peaks around 60-70%. With the current figure at around 40-45%, the data suggests that there is still room for growth for most 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 negative 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: Short-term investors can take advantage of intraday fluctuations to increase their holdings of stocks attracting capital and leading sectors. However, once the index has risen sharply and entered a higher resistance zone, risk management is essential. Investors should avoid chasing rallies during periods of euphoria, maintain a reasonable portfolio allocation, and proactively take partial profits when stocks reach expectations.