Market Update [May 31] – VN-Index loses 960 after falling over 9 points

31/05/2019 16:55

Report: Market Update

On Friday (May 31st), the VN-Index traded on a negative note, and closed at its lows of the day due to negative impact from world markets. By the closing bell, the VN-Index dropped 9.46 points (-0.98%) to close at 959.88. Trading volume was nearly 140 million shares, worth VND3,200 billion. Breadth was negative, with losers topping gainers 199 to 91. Foreign investors net bought VND204 billion on the HSX, mainly in HPG.

In view of technical analysis, the VN-Index’s daily chart shows a long red candlestick called “Marubozu”, and loses the support level of 960, while the RSI moves 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 940 – 950, the next support range is forecast at 920 – 930. In a positive scenario, if the index rebounds, the nearest resistance range of VN-Index will be forecast at 960 – 970, 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 940 – 950 continues to be broken. Based on Kelly formula, the recommended proportion of the portfolio is 90% cash/ 10% stocks.

Please see the attached file for more details.