Market Gaining Momentum for an Explosive Phase
At the “Vietnam and Indices: Financial Prosperity” program, Mr. Tran Hoang Son, Market Strategy Director at VPBank Securities (VPBankS), noted that over the past four weeks, the market has experienced significant volatility.
The VN-Index fluctuated within a range of 1,600 to 1,689 points on the weekly chart. The long-term trendline connecting the peaks since 2023 acts as a key resistance level.
Additionally, the Pivot Point resistance at 1,689 points is a critical barrier. When approaching this level, investors should limit buying and consider taking partial profits to avoid sharp market swings.
However, a positive sign is the VN-Index’s strong support at 1,600 points. Mr. Son anticipates this as a foundation for the next upward phase. The index has risen approximately 60% from its April low, with recent fluctuations primarily driven by short-term profit-taking.
Despite foreign investors’ net selling of nearly VND 38 trillion over the past five weeks, this has only caused minor market volatility, keeping it within a 5% range.
“This is merely a pause. To capitalize on the next rally, medium-term investors should maintain 60-70% portfolio exposure and reserve 30-40% for opportunities when the market offers favorable prices or breaks above 1,700 points, confirming the next upward trend,” advised the VPBankS expert.
Regarding the upgrade news, the expert believes the market has already priced in late August and September expectations, slowing the rally. However, as the announcement date nears, its impact will intensify. “Personally, I expect FTSE Russell to announce Vietnam’s upgrade on October 7th, triggering a market surge,” he predicted.
This upgrade will further support Q4 growth. Financial services, securities, and banking stocks may resume their upward momentum following the news.
Post-upgrade, the market will focus on corporate earnings. Stocks of companies with strong results typically rise 15-20 days in advance, offering investors a strategic opportunity to build a robust portfolio.
Prolonged Rally Ahead
Mr. Tran Hoang Son believes the rally since April is robust but only halfway through. Central banks’ rapid policy easing, with the Fed expected to cut rates in September and potentially further in 2024, historically boosts global asset prices. Both global and Vietnamese macroeconomic fundamentals are visibly improving.
Vietnam’s credit growth reached multi-year highs in the first eight months, driven by monetary policy, macroeconomic effects, and corporate earnings.
Market liquidity has doubled from early-year levels of VND 20-25 trillion per session to VND 40-45 trillion, peaking at VND 55-60 trillion. Strong investor participation sustains the rally, making this pause crucial for strategic positioning.
During this sideways phase, technical analysis suggests investors allocate 20-30% to target stocks with promising fundamentals, buying at strong support levels and awaiting price and volume breakouts. Medium-term investors should hold profitable long-term positions, as the rally has further to go.
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