Research Center

Long positions captured at 820-825 pts zone should not be closed, take a profit at 865 pts and stop a loss at 812 pts.

The market sentiment has become positive, but the downside risk is still intact in the next session. Notably, the 900-pts threshold is significant resistance. Thus, investors should be careful and wait for the next signal to define the trend.

The re-emergence of COVID-19 in Da Nang city has pushed back hopes of a strong second half recovery. However, we do not believe that Vietnam’s residential market will see a sharp crash in FY20-21F as the typical indicators of a bubble market are currently not prominent. We expect governmental actions like infrastructure spending, regulatory amendments plus softer mortgage rates could bolster volume in FY21F.

Long positions captured at 820-825 pts zone should not be closed, take a profit at 865 pts and stop a loss at 812 pts.

The downside risk increases in the short term due to the sharp contraction. The downtrend may be formed if the VNIndex closes below the 20-period moving average. Thus, investors should be careful and wait for the next signal to define the trend.

Last week, selling activities maintained but with lower pressure. Breaking down by sectors, Real Estate, Industrials and Materials were sold the most whilst Energy, Financials, and Utilities attracted the most foreign demand across the market. Regarding to ETF flow, Vietnam maintained the positive flow of money, thanks to VFMVN Diamond ETF which attracted the total of USD1.3mn last week despite the outflow of Premia MSCI Vietnam (USD0.9mn).

Recent developments in the interbank market and G-bond markets continue in August as interbank rates and G-bond yields remain extraordinarily low. Subdued credit growth, from our view, is the main factor behind that downward trend. We maintain our view that these ultra-low interest rates would be reversed if the first lending market started to pick up.

820–825 pts is identified as the significant zone for the intraday bullish resumption. Thus, traders should be captured the long at 820-825 pts zone, take a profit at 865 pts and stop a loss at 812 pts.

Despite the contraction, the short-term uptrend is still intact. The target is a zone 910-930 pts due to the breakout of the downward channel. Therefore, traders should increase their long position and focus on leading stocks.

As mentioned above, the VNIndex can reach at 910-930 pts. Thus, investors should increase their long position and focus on leading sectors such as Banking.