20170505_BSC_Vietnam Daily Review_EN_Testing the 720 level

Highlights
At the end of the week, the market corrected immediately at the start of the session and went down to 719.86 level at the middle of the morning session, however due to bottom buying activities, the market has recovered and went up ti 721.17 level in the afternoon session. Although many penny stocks reached the ceiling price such as CDO, SGT at the end of the session, VN-Index cannot hold the price until the end of the market and closed at the 720 level, decreased by 2.02 points (0.28%). The main supportive force for the market are Largecap stocks like MBB(+0.12), VIC(+0.09), ROS(+0.08) and Real estate industry including DXG, DLG, LDG. Moreover, stocks that once was the sportive stocks of the market such as VNM (-0.97), GAS(-0.41), BID(-0.3),VCB (-0.26)  during the previous session had become the main factor causing the correction of the market. In addition, after strong correction at the beginning of the session, gas and oil stocks has rebound back to the market when news of PVD’ oil rig operation spread into the market. This information helped PVS, PGS rebound back to the previous closing price, PVD reach the ceiling price and slow down the down trend of GAS. Although the market went down to day, the market scale was positive with the bullish stock dominated the market(156 bullish stock/ 106 bearish stocks) thanks to penny stocks. Market liquidity went down significantly in comparison to the previous session, from VND 4.1 billion to 3.4 billion. At the end of today session, HNX-Index moved up 0.19 point (0.21%) up to 89.71 level and continued approaching the 90-point resistance level.


Recommendation
The market today had a negative trading session mainly due to the selling pressure from investors when they gained profit from bullish Largecap stock in previous trading session like VNM and the banking stocks. Although the market went down below the 720 level, it had returned back to this level. This phenomenon illustrated the solid of the supportive 720 level. In today session, the cash flow continued rotating between different industries; however, it was divested from Largecap stocks and invested into Smallcap stocks (mainly penny stock). BSC recommend investor to utilize this correction in order to increase the proportion of good fundamental stocks in the investors’ portfolio.