Research Center

As the VNIndex has returned to its resistance 825-830, selling pressure may increase today. Therefore, traders should not chase price for the time being.

NTC’s market price has been exploded from year to date as the investors are waiting for land granting decision from Binh Duong People Committee to the company to develop NTU3 industrial park. We believe this event could exist soon as the Vietnam government is eager to approve the new expansion/establishment of industrial properties. However, we think retail investors seem overreacted to underlying land presale surge as the travel restriction could prolong, in our view.

We saw that economic recovery was losing its momentum in July 2020 in some aspects. Trade activity slowed down as our most import trading market as the U.S faced tough in controlling the pandemic. Other indicators, including CPI, IIP, FDI, also decelerated to some extent. We argue that the virus containment in the U.S will take time, and the Da Nang outbreak will likely hurt our production. Hence, we predict economic indicators to decrease modestly in August 2020.

Given the current well-controlled virus situation, we maintain our target of 900-1,000 for the VNIndex by the end of this year. However, the outbreak of Danang teaches us that there is a high probability of another virus resurgence, another economic lockdown as well as another sell-off of the stock market and the recovery path will be intermittent, a new normal life.

Long VN30F2008 at 725-730 pts zone, take a profit at 800 pts and stop a loss immediately at 720 pts.

Cash flows into large-cap stock, making optimistic market sentiment in the short term. However, the VNIndex’s 20-period moving average or July-bottom at 920-930 pts is the significant resistance. Therefore, traders should be careful and wait for more bullish signals.

Last week, foreign buying activities ticked up with net buy value recorded at USD33mn. Breaking down by sector, Consumer Staples, Real Estate, and Financials attracted most foreign demand across the market. Regarding to ETF flow, Vietnam maintained the positive flow of money, but with lower pressure. To be specific, X FTSE Vietnam, SSIAM VNFIN Lead, VFMVN Diamond ETF, and VanEck Vietnam ETF were the main contributors which attracted the total of USD9mn money inflow. However, VFMVN30 ETF ended up to be net sold, recorded at USD3.6mn, a 6-months high.

Market sentiment has become cautious as the downside risk is still intact. Besides, the short-term downtrend is formed as the 20-period moving average of the VNIndex closes below the 50-periods moving average. Therefore, traders should be careful and stay on the sidelines.

Long positions captured at 710 pts zone should not be closed, take a profit at 740 pts and keep setting the stoploss level at 690 pts.

Despite the market is traded at balance stage, indicators give the confirmation for the bearish market as well as market sentiment has become pessimistic in the short-term. Thus, investors should reduce proportion of leading stocks during this scenario and stay on the sidelines.