Vietnam Insight

▶ The index opened the trading session with a sharp gain of 45.08 points due to easing concerns about the Middle East conflict after President Donald Trump announced that the war between the US and Israel against Iran would soon end. Simultaneously, news of European countries releasing oil reserves helped cool oil prices down to $85/barrel from yesterday's high of $120/barrel. These positive developments prevented a further decline in the index, and the VN-Index recorded its first recovery session.

▶ At the close of trading, the VN-Index rose 23.94 points (+1.45%), reaching 1,676.73 points; the HNX-Index rose 4.71 points (+2.00%), reaching 240.07 points. Market liquidity remained high, exceeding the 20-day average, at 45.6 trillion VND, corresponding to 1,734 million shares traded. Foreign investors made net purchases of VND 1,133 billion today, with the largest net purchases in HPG, MWG, and FPT. Conversely, STB, VIC, and VPB were the stocks with the largest net sales.

▶ Technical perspective: The market continued its volatile session, at one point rising nearly 60 points before reversing and falling. At the close of trading, the market rose nearly 24 points, but this was less than half of yesterday's bearish candlestick, indicating that the market has temporarily halted its decline, rather than confirming a bottom. The VN-Index has temporarily fallen more than 12% from its recent peak, a percentage drop comparable to the impact of the tariff news. Technically, short-term risks are dominant as the VN-Index lost the 1,750 support level and retreated to the medium-term MA200 support level at 1,630. The market is likely to continue fluctuating around the 1,630 support level to test demand and gradually form a bottom around this area.

From a statistical perspective, we monitor the percentage of stocks trading above the 50-day moving average (EMA50) as an indicator to determine the market bottom. Historically, the VN-Index typically confirms its bottom when this ratio fluctuates between 30% and 40%, and peaks around 60-70%. With the current figure at around 40-45%, the data suggests there is still room for growth for most stocks.

In the base scenario: A rebound 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 spillover effects, providing investors with a suitable stop-loss point in case the market receives unexpected negative news. Accordingly, in a negative scenario, if the VN-Index falls back to the previously accumulated sideways range around 1,600-1,700, investors may consider reducing their holdings to manage portfolio risk.

Strategy: Short-term investors should prioritize staying out of the market because the risk factors of the conflict are very difficult to predict. For medium-term positions bought at low prices, investors can confidently hold positions in sectors such as steel and banking, but with moderate weighting.