Vietnam Insight

▶ The index opened the trading session with a sharp gain of 19.13 points after a positive recovery at the end of the previous session. The VN-Index continued to face strong net selling pressure from foreign investors due to concerns about the Middle East conflict, although selling pressure in Asian stock markets eased. The index experienced strong selling pressure from foreign investors today, but strong demand from domestic investors helped the VN-Index trade around the reference level for most of the session before closing below the reference mark.

▶ At the close of trading, the VN-Index fell 9.76 points (-0.54%) to 1,808.51 points; the HNX-Index fell slightly by 0.26 points (-0.10%) to 257.59 points. Market liquidity remained high, exceeding the 20-day average, at VND 40.2 trillion, corresponding to 1,334 million shares traded. Foreign investors sold heavily, netting VND 3,124 billion today, with the largest net selling value in FPT, HPG, and VHM. Conversely, KDH, DPM, and DGW were the stocks with net buying.

▶ Technical perspective: The market opened strongly higher and maintained a positive trend throughout the morning session. However, overwhelming selling pressure caused the market to close in the red, with a drop of over 10 points. Technically, short-term risks remain dominant as the VN-Index stays below the MA20, the recovery trend is not yet sustainable, and volatility risks persist. The support level of 1,800 – 1,820 will be a crucial threshold to test demand before the market establishes a new equilibrium.

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: The market rebounding after retesting the 1,800 support level will head towards the short-term previous peak at 1,900. The necessary conditions for the market to maintain an uptrend are continued improved liquidity (with the participation of institutional investors) and the gradual spread of capital to other sectors.

In the negative scenario: The strong upward momentum with improved liquidity and market breadth indicates positive spread, creating a suitable stop-loss point for investors should the market receive unexpected negative information. Accordingly, in the negative scenario, if the VN-Index falls to the previously accumulated sideways range around 1,600-1,700, investors may consider reducing their holdings to manage portfolio risk.

Strategy: Medium- to long-term investors can buy into sectors that have not yet risen and have a solid accumulation base. However, when the index has risen sharply and entered a higher resistance zone, it is preferable to hold and be ready to take short-term profits rather than making new purchases, especially with stocks that move in line with the market.