Vietnam Insight

▶ The index opened the trading session with a gap down of 11.72 points after the recovery of the previous session. The recovery weakened as concerns about oil prices returning to the $100/barrel mark resurfaced. Selling pressure on the index persisted throughout the trading session, and foreign investors returned to net selling, contributing to increased pressure on the index during the recovery. However, the selling pressure was not too strong, and the index maintained above the 1,700 support level.

▶ At the close of trading, the VN-Index decreased by 18.73 points (-1.08%), to 1,709.61 points; the HNX-Index increased slightly by 0.83 points (+0.34%), reaching 247.85 points. Market liquidity continued to decline during the correction, below the 20-day average, at 29.7 trillion VND, corresponding to 1,079 million shares traded. Foreign investors net sold VND 1,085 billion today, with the largest net selling values in FPT, VHM, and TMS. Conversely, MWG, VNM, and VCI were the stocks with net buying.

▶ Technical perspective: The market experienced a slight correction with red dominating throughout the trading session. Today's session was essentially a test of supply pressure after the previous strong rally, as shares began to be gradually credited to accounts. On the positive side, many blue-chip stocks maintain low liquidity, and there are no signs of capital withdrawal. 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 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: Short-term investors should prioritize staying out of the market because the risk factors are very difficult to predict. With medium-term positions bought at low prices, investors can confidently hold positions in sectors such as steel and banking, but with moderate weighting.