Vietnam Insight

▶ The market experienced a tug-of-war in the closing session of the week. The index gained during the morning session, but increasing selling pressure in the afternoon caused many stocks to reverse downward, leading the VN-Index to close near the reference price. Notably, the Fertilizer group performed well today with many representatives rising strongly, such as DCM, DPM, and BFC hitting the ceiling price, driven by the strong increase in urea prices since the beginning of the year. Oil & Gas stocks also contributed significantly to supporting the market. Foreign investors paused their long net-selling streak; specifically, FPT saw net buying return after a continuous period of being sold off. The market maintained its rhythm quite well with liquidity recorded at an average level as it approached the old peak.

▶ At the end of the trading session, the VN-Index increased by 0.69 points (+0.04%) to close at 1,880.33 points; the HNX-Index rose by 0.49 points (+0.19%) to reach 262.82 points. Total market liquidity reached 33.4 trillion VND, hovering at the 20-session average, corresponding to approximately 1.1 billion shares traded. Foreign investors reversed to a slight net buy of 190 billion VND, with prominent net buying recorded in FPT, GMD, and MWG. On the other hand, typical net-sold stocks included VNM, VCB, and FRT.

▶ Technical Perspective: The VN-Index continued to trade with fluctuations as the index approached the resistance zone around 1,900 points. Although the score remained almost flat, cash flow stayed at a high level, indicating that the market is still moving in a positive state. Today's session was merely a technical shake-out to cool down and absorb short-term profit-taking supply, with no signs of distribution appearing yet. The dominant trend still leans toward an upward direction, and the room for extending the rally remains if liquidity stays positive.

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 often confirms a bottom when this ratio fluctuates between 30% and 40%, and peaks around the 60-70% range. With the current figure at approximately 40-45%, data suggests that growth potential remains for the majority of stocks.

Strategy: Medium and long-term investors can buy into groups that have not yet rallied and have tight accumulation bases. However, as the index has risen sharply and entered higher resistance zones, priority should be given to holding and being ready for short-term profit-taking rather than new purchases, especially with market-sensitive stock groups.