VN-Index may face short-term volatility

>> Upbeat about VN-Index's medium-term outlook

The VN-Index popped higher at the open on Wednesday, but sellers quickly stepped in to send the index downward for the rest of the morning session. In the afternoon, following a period of recovery, the VN-Index faced strong selling pressure at the end of the session to close down 0.7%, or 9.09 points, to 1,272.64. The index had risen 9.1% since April 19, before today’s losses. The HNX Index also fell, sliding 0.6% to 244.15.

Nearly every sector’s stocks fell except Industrial goods and Services (0.8%), Construction Materials (0.1%), Travel (1.7%) and Health care (1.1%). The Telecommunications sector (-3.3%) fell the most today, followed by Autos (-2.1%) and Insurance (-1.4%), led by VGI (-2.5%), VEA (-2.7%) and BVH (-3.0%), as investors took profits after recent strong gains.

HVN (5.2%) stood out as one of today’s top performers as investors continued to expect HVN’s business results to recover in the coming quarters thanks to the aviation industry’s ongoing rebound.

Although the banking sector declined today (-0.8%), led by VCB (-1.0%), BID (-1.0%), and CTG (-1.7%), LPB continued to be the sector’s highlight with a gain of 3.8% due to its upcoming share issuance and the impact this could have in easing pressure on the bank to increase deposit rates.

Foreign investors had their fourth consecutive net selling session with a net trading value of VND1.66tn (USD65mn), focusing on CTG (VND336bn, USD13mn), HPG (VND232bn, USD9.1mn) and VND (VND189bn, USD7.4mn). On the other hand, FPT (VND136bn, USD5.3mn), TCH (VND45bn, USD1.8mn) and TCB (VND42bn, USD1.7mn) were mainly bought.

>> VN-Index may go up further?

Other top performers today included EIB (3.0%), GAS (0.4%), and VND (1.7). Conversely, top laggards included HPG (-1.9%) and GVR (-2.0%).

In technical term, VN-Index dropped again. There was sign of a thick dropping candle when trying to surpass correction with increasing volume, showing stronger selling pressure, and the price might drop. However, PHS still thinks that 1,234- 1,257 points might still be supported. The situation might be struggling with candle change and smaller volume in the next few sessions. For HNX-Index, it also dropped, and the volume increased. The index might still struggle within 238-247 for a few sessions before breaking peak level. The investment strategy might be to raise the weight; by placing priority on strong codes that surpass the peak level before the market, like technology, aviation, thermal power, retail, fertilizer, textiles, oil, and sea transport, or the groups that gained afterward that are relatively improving the health like Construction, Real estate, industrial Park, Steel, and Securities, Power, Insurance, and Plastic.

Huyen Hoang, analyst at BSC, believed that VN-Index may continue to rise and retest the upper band of the BB, around the 1,288-1,295 point threshold. However, with momentum indicators such as the CCI and RSI entering the overbought region, the index may face short-term volatility.

“Investors could consider opening trading positions with a reasonable weight or covering a portion of their sold positions when the VN-Index tests the support zone of 1,250-1,260 points. For investors with a high stock weight or using margin, it is important to manage risk for their portfolio when the VN-Index approaches the 1,288-1,295-point zone again or breaks through the 1,245-1,250-point zone”, said Huyen Hoang.