Vietnam Stocks Trade Only Two Sessions This Week: What Should Investors Prepare For?

As Vietnam's stock market braces for an unusually short trading week, with only two sessions scheduled before the extended National Reunification Day and International Workers' Day holiday, investors are being urged to exercise caution and strategic planning. The VN-Index is showing signs of fatigue as it nears the 1,880-point resistance level, a sentiment echoed by analysts at Shinhan Securities Vietnam (SSV). The recent sharp decline on April 24th, which saw the index shed nearly 20 points, underscores investor behavior of cashing in before a long break, consequently dampening liquidity.

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The upward trend of the VN-Index is showing signs of weakening as the index approaches the resistance zone around 1,880 points.

Beyond domestic factors, the market remains sensitive to international developments, particularly the lingering tensions between the US and Iran. While currently de-escalated, any unexpected flare-ups could negatively impact sectors like oil, fertilizers, chemicals, and logistics. However, Vietnam's domestic economic fundamentals remain robust, supported by high growth targets, accelerated public investment, easing interest rates, and continued FDI inflows. The ongoing season of first-quarter earnings reports and shareholder meetings is also expected to provide short-term support.

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The buying force in the market is weakening. Technical indicators are also declining, indicating that the growth momentum is slowing down.

Technical analysis from Vietcombank Securities suggests a weakening buying force and declining technical indicators, signaling a slowdown in the upward momentum. The index might retest support levels around 1,830-1,840 points, potentially dipping further to 1,820. Conversely, any upward movement will face significant hurdles in the 1,890-1,910 range. ACB Securities (ACBS) observes a clear divergence in capital flows, with large-cap stocks, particularly those linked to Vingroup and banking sectors, attracting investment, while other sectors face selling pressure. This indicates that while the uptrend isn't broken, market momentum is increasingly reliant on a few key stocks.

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Capital flows are clearly differentiating, focusing on a few large-cap stocks, especially those related to Vingroup and banks, while many other sectors are under selling pressure.

An Binh Securities (ABS) also highlights the risk of short-term correction as the VN-Index approaches 1,880 points. Limited capital dispersion and increased selling pressure suggest a consolidation phase is likely, though any downturn is not expected to be severe. In light of these analyses, securities firms recommend investors maintain a prudent cash-to-asset ratio before the holiday. Aggressive buying should be avoided during rallies, with a focus on exploratory purchases during market corrections, favoring sectors with solid accumulation bases or positive earnings outlooks like real estate, construction, and banking. Crucially, investors should prepare resources to capitalize on potential opportunities should the market experience a significant dip due to unforeseen events.

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The risk of short-term correction still exists as the VN-Index approaches the 1,880 point level. Capital has not spread widely and selling pressure is increasing, making the possibility of the market entering a consolidation phase more apparent.