20160719_BSC_Vietnam Daily Review_EN_Unsuccessful attempt

Highlight

VN-Index traded mostly in green, approaching the top and the previous psychology zone at 675-680 points after peaking at 677.3 points thanks to price increase of VNM. Strong selling pressure on VIC at 13h45 after VIC released "Tan Lien Phat Construction Jsc. has decided to suspend the conversion of loans worth 1.201.9 billion in industrial Group JSC Truong Thanh Furniture (TTF) due to detection a number of serious discrepancies between the actual figures and data provided by TTF ". Selling pressure also draged TTF to floor, and quickly spread to other Bluechip such as BID, GAS, STB, particularly in surged shares such as KSB, DRH. VN-Index has slumped more than 10 points. In general, the market is not too negative and there is still a divergence in many stocks, including Real estate and Construction (HBC, HUT, KBC, LDG), Construction materials (CVT, TLT, VIT), on the other hand, Steel group (+ 3.3%) and Banking groups except VIS and VCB corrected. VN-Index closed at 667.8 (-0.9%), volume did not changed much from the previous session (continued below the 10-day average), gainers overwhelmed strongly by losers on the 2 floor, 277 stocks dropped / 169 gainers.

Recommendation

Though the market failed to test the top 675-680, it still lies in the up candlestick on 13/7. Hence, short-term trend has not been violated. In terms of Elliott wave, it is likely that VN-Index is moving in the wave 5 of the medium-term recovery cycle since 22.01.2016. Upper and lower zones of the price range from 660 to 675 will confirm it is merely wave 5 or extended wave 5. If VN-Index falls below 660 points, it is likely that VN-Index is in normal wave 5 and 675 points was short-term top of medium-term wave 5 and it will correct according to the principle of a-b-c with the target at 630-640 points. Conversely, if VN-Index overcomes 675-680 points, it will extend the wave 5 with target price stays above 700 points.