Market Update [April 17] – VIC, VHM and BID lead VN-Index lower

17/04/2019 16:48

Report: Market Update

On Wednesday (April 17th), although opening higher, however, the VN-Index lost the ground to close at its lows of the day due to high selling pressure in large-cap stocks. In particular, VIC, VHM, BID, VNM and VRE were the large-cap losers, offsetting the small gains in GAS, VCB, TCB, VPB and SAB. By the closing bell, the VN-Index lost 5.07 points (-0.52%) to close at 972.10. Trading volume was nearly 190 million shares, worth VND4,300 billion. Breadth was negative, with losers topping gainers 189 to 112. Foreign investors net bought VND162 billion on the HSX, mainly in MSN.

In view of technical analysis, the VN-Index’s daily chart shows a red candlestick dwelled below the MA(5) and MA(50), while the RSI continues to move down to 30 – 40 range, which are the signs of negativity. Therefore, we believe that, in a negative scenario, the VN-Index will test the nearest support range of 950 – 960, the next support range is forecast at 930 – 940. In a positive scenario, if the index rebounds, the nearest resistance range of VN-Index will be forecast at 970 – 980, at which investors can sell a part of the existing short-term portfolio.

We recommend investors avoid bottom fishing, while keeping a low stock proportion in order to minimize risks if the support level of 950 – 960 continues to be broken. Based on Kelly formula, the recommended proportion of the portfolio is 90% cash/ 10% stocks. Tail risks include black swan events.

Please see the attached file for more details.