Market Update [April 22] – VN-Index narrows losses thanks to bargain hunters

22/04/2019 16:37

Report: Market Update

On Monday (April 22nd), although losing nearly 7 points at its lows of the day, however, the VN-Index minimized the losses to close near the unchanged line thanks to the rise of some large caps such as VIC, VHM, GAS and SAB. Adversely, VNM, BID, TCB, CTG and BVH were the large-cap losers, weighing on the index. By the closing bell, the VN-Index inched down 0.35 points (-0.04%) to close at 965.86. Trading volume was nearly 220 million shares, worth VND4,000 billion. Breadth was negative, with losers topping gainers 195 to 102. Foreign investors net bought VND77 billion on the HSX, mainly in HPG.

In view of technical analysis, the VN-Index’s daily chart shows a short green candlestick called “Hammer” at the neckline of head-and-shoulders pattern, while the RSI rises above 40, which are the signs of positivity. Therefore, we believe that, in a positive scenario, the VN-Index will test the nearest resistance range of 970 – 980, at which investors can sell a part of the existing short-term portfolio. In a negative scenario, the nearest support range of VN-Index is forecast at 950 – 960, the next support range is expected at 930 – 940.

We recommend investors should not buy at high ask in this period, and consider taking profits partly in strong gain sessions. 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.