Vietnam Insight

Optimism grows over an imminent deal to reopen the Strait of Hormuz. US stock futures were little changed on Wednesday after the major indexes surged to fresh record highs in the previous session, supported by strong corporate earnings and rising optimism over an imminent deal to reopen the Strait of Hormuz. In extended trading, SpaceX plunged 7% despite reporting better-than-expected second-quarter revenue in its first earnings release as a public company, as investors remained concerned about the company's heavy spending on artificial intelligence infrastructure. AMD also fell 9% after the chipmaker delivered only a modest earnings beat. During Tuesday’s regular session, the Dow and S&P 500 climbed 1.71% and 1.79%, respectively, with both benchmarks closing at new record highs. The tech-heavy Nasdaq Composite jumped 2.59%. Investors are now awaiting another round of corporate earnings on Wednesday, including results from Eli Lilly, AppLovin, Walt Disney, Uber, and Sandisk.

Range-Bound Trading with Resistance at 1,800. The VN-Index closed the trading session at 1,777.23 points (+14.39 points, +0.82%), with trading volume remaining below the 20-session average. During the session, 175 stocks advanced while 140 declined. VIC, VHM, and STB were the primary positive contributors to the index, whereas VCB, HPG, and GAS exerted downward pressure. Foreign investors recorded a net buy of nearly VND890 billion, focusing on VIC, VHM, and MBB, while net selling VNM.

Trading Strategy: Investors may take advantage of market pullbacks to gradually accumulate positions while maintaining a prudent cash allocation to manage risk and preserve flexibility to increase exposure once a market recovery is confirmed. Investors should avoid using margin to bottom-fish, as the market may still be in the process of forming a second bottom. In addition, technical rebound sessions provide an opportunity to rebalance portfolios by reducing exposure to companies whose business performance has fallen short of expectations.

Buy recommendation: POW, PAN; Current portfolio: LPB; Watchlist: HPG, REE, NVL

High-risk stocks to avoid: Real estate (PDR, KDH, NLG), HDG and PNJ