Vietnam Insight

▶ The recovery continued into Thursday's trading session, with the index recording a positive increase of nearly 40 points accompanied by improved liquidity, surpassing the 20-day average. The upward momentum spread well, with most sectors performing well and supporting the index. The banking sector was the first to signal a surge, playing a leading role in driving the market's explosive growth. Overall, this is a positive sign as more capital has entered the market and could be the foundation for a solid recovery with a large margin.

▶ At the close of trading, the VN-Index increased by 39.98 points (+2.35%), closing at 1,744.66 points; the HNX-Index increased by 3.37 points (+1.24%), reaching 275.05 points. Liquidity across all three exchanges improved to 21.5 trillion VND, corresponding to approximately 943 million shares traded. Foreign investors reversed their trend to net buying of VND 679 billion, notably in VIC (+VND 194 billion), VNM (+VND 158 billion), and MSN (+VND 105 billion). Conversely, the stocks experiencing net selling were TCB, ACB, and NVL.

▶ Technical Perspective: The Follow-Through Day (FTD) breakout session, with significantly improved liquidity and capital flowing into various sectors (starting with blue-chip stocks like banks before expanding to others), along with the stable return of foreign capital amidst significantly discounted market valuations after the forced selling phase, indicates a more solid foundation for the current recovery and is likely not merely a technical rebound.

The VN-Index closed completely covering the sharp bearish candle of July 22nd with very limited selling pressure, forming a Bullish Marubozu candlestick pattern, reflecting the dominance of buying pressure throughout the trading session. Recent developments also show that the market quickly negated the breakout signal below the lower boundary of the 1,600–1,780 point sideways range. Accordingly, the VN-Index is expected to soon return to test the area around 1,800 points (corresponding to the MA50 and MA200) before facing short-term profit-taking pressure in this area.

Statistics: In the first trading session of the week, the percentage of stocks trading above the MA200 line fell below 25%, indicating widespread selling pressure at its peak and the market trading at a bottom. Historically, this indicator only fell below 25% during some periods of sharp corrections such as July 2018, March 2020, November 2022, October 2023, or April 2025. After these periods, the VN-Index recorded significant recovery in the following months.

Strategy: Following the recent sharp correction, the valuations of many stocks have become more attractive, opening up opportunities for accumulation in companies with strong fundamentals and positive growth prospects. Investors can take advantage of market corrections to gradually disburse funds, while maintaining a reasonable cash ratio to manage risk and be ready to increase positions when the market trend confirms a recovery. Investors should limit the use of leverage (margin) to buy at the bottom until the market confirms that the downtrend has stopped.