Vietnam Insight

▶ Following two consecutive increasing sessions after the Lunar New Year holiday, the market faced profit-taking pressure during Wednesday's session, leading to a slight decline in indices. Significant corrections in several blue-chip stocks such as VIC, VHM, and FPT exerted considerable downward pressure on the index. Conversely, bright spots emerged in HPG, the Industrial Real Estate group, certain banking stocks like STB and SHB, and the Oil & Gas sector. Foreign investors turned to net sellers, highlighted by a massive net selling value of over 2,300 billion VND in FPT, while HPG was the most heavily collected stock with a net buying value exceeding 1,700 billion VND. Overall, the market exhibited high divergence with uneven movements across different sectors.

▶ At the close of the trading session, the VN-Index decreased by 6.71 points (-0.36%) to finish at 1,860.91 points; the HNX-Index increased by 0.51 points (+0.19%), reaching 263.23 points. Total market liquidity surged to 41 trillion VND, corresponding to over 1.57 billion shares traded. Foreign investors recorded a net sell of 1,062 billion VND, with prominent net buying values noted in HPG, GVR, and PLX. On the other hand, notable net selling occurred in FPT, DGW, and VCB.

▶ Technical perspective: VN-Index continued to trade sideways with high volatility as it approached its historical peak, ending the session in the red with liquidity continuing to climb higher than in recent sessions. Increased short-term profit-taking pressure caused the market to trade mostly in the red. However, proactive demand and effective absorption helped liquidity improve significantly. The primary trend remains bullish, and there is still room for the upward momentum to expand if liquidity remains at positive levels.

From a statistical perspective, we monitor the percentage of stocks trading above their 50-day Exponential Moving Average (EMA50) as an indicator to identify market bottoms. Historically, the VN-Index typically confirms a bottom when this ratio fluctuates between 30% and 40% and forms a peak around the 60-70% range. With the current figure at approximately 40-45%, the data suggests that there is still growth potential for the majority of stocks.

Base Case: After surpassing 1,800, the market is retesting the upper bound of the previous sideways range (around 1,720-1,780). For the uptrend to be sustained, we expect buying demand to emerge around this zone, helping the VN-Index regain its upward momentum with improved liquidity and positive market breadth.

Bearish Case: In a negative scenario, if the VN-Index continues to decline sharply and loses the previously accumulated sideways channel of 1,600-1,700, investors should consider reducing their positions to manage portfolio risk.

Strategy: Short-term investors can capitalize on intraday volatility to increase their weight in stocks attracting cash flow and leading sectors. However, as the index has surged and entered higher resistance zones, risk management is essential. Investors should avoid chasing prices (buying-at-any-cost) during periods of market euphoria, maintain reasonable position sizing, and proactively lock in partial profits once stocks reach their targets.