Vietnam Insight

▶ The index opened the trading session with a slight gap down of 0.86 points after the recovery from the previous session. The recovery sentiment continued as tensions in the Middle East eased. Oil prices remained stable below USD90/barrel. The index recovered above the 1,700 mark with the recovery spreading across most sectors. Simultaneously, news of buy orders from a number of chairmen and insiders of listed companies contributed positively to today's recovery.

▶ At the close of trading, the VN-Index increased by 51.61 points (+3.08%), reaching 1,728.34 points; the HNX-Index increased by 6.95 points (+2.89%), reaching 247.02 points. Market liquidity decreased during the recovery session, falling below the 20-day average to VND 32.1 trillion, corresponding to 1,129 million shares traded. Foreign investors net bought VND 1,085 billion today, with the largest net purchases in MWG, ACB, and HPG. Conversely, STB, SSI, and BID were the stocks with the largest net sales.

▶ Technical Perspective: The market rose sharply from the beginning of the session and closed near its highest point of the day at 1,728 points, recovering about two-thirds of the losses from the March 9th session. This is considered a technical rebound after a more than 12% drop from its peak. Low liquidity indicates that selling pressure has somewhat weakened while demand remains cautious. Based on momentum, the VN-Index is likely to continue recovering towards the MA100 level around 1,750 to further test demand. If it fails, the market may return to test the psychological level of 1,700 points again.

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 current figures hovering 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 a 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.