Week 40__Distributing market season due to upcoming earnings season for Quarter III__TA_HVN, POW, VRE, STB, VGI _2019101

Next week stratergy

VN-Index accumulated thanks to the decrease in selling pressure from foreign investors and diverged movements of the index itself. VN-Index moved sideways compared to the beginning of the week until 10/10. Despite volatile fluctuations in the world market, VN-Index is accumulating and stabilizing after touching short-term support range, along with strong reduction of net selling value by the foreign investors and positive Q3 business results in some key stocks. 12/19 sectors declined although gains from stocks of banking sector with positive results supported VN-Index to stay above 985 points. The market in this week’s last session and next week is likely to fluctuate strongly with information from the US-China trade talk. The VN-Index is forecasted to accumulate around 985 points, diverging according to Q3 business results, in the process of approaching resistance. 


The world market fluctuated before the US - China trade talk, FED signaled readiness to lower interest rates. FED Chairman said that he will be ready to support growth if necessary, amid negative production figures last week. This signaled that Fed continue to reduce interest rates and possibility for interest rates reduction in 29-30/10 session soared to 80%. The Fed also bought treasury bills, thereby increasing reserves but did not consider this a QE package. The focus of the market is on US - China trade negotiations. The US put 28 businesses on a commercial "blacklist" and visa restrictions with many Chinese officials, while China would not include commitments to industrial policy reforms and subsidies. Possibility of negotiation failure and the US imposing additional tariffs of US $ 250 billion on Chinese goods from 25% to 30% from October 15, are amongst factors that make global market decline and is forecasted to fluctuate next week.

Reformed in the right direction, Vietnam increased by 10 places in ranking for global competitiveness. Vietnam increased by 10 places to 67/141 countries and territories in the World Economic Forum's 2019 Global Competitiveness Index (WEF) report. This is the result of drastic policies in improving investment environment. Such change will continue to attract international investors, and, according to the WEF, will direct trade flows to benefit Singapore and Vietnam in the context that global economy may slow down from geopolitical instability and trade tension increase.


VN30 index struggled. Future contracts fluctuated narrowly with decreasing liquidity. Future contracts decreased more than the -0.2% decline of VN30, narrowing the price difference to -0.01%, 0.2%, -0.03% and -0.14% respectively. Average volume decreased to 7,036 8,802 billion VND/session, down 20%. Open interest dropped by 9% to 20,153 contracts. VN30 moved closely to SMA20 and created doji candles, showing no signal of a clear trend, which affected and narrowed trading value and number of open contracts last week. Continue to monitor price movements at support 910 and resistance 920 to have a suitable strategy. Fast trading without holding position over the day are advised to avoid unexpected fluctuations.


Recommend short-term trading: Continue to monitor movement near resistance at 1,000 points and support at 985 points, support for short trading activities for stocks with position.
Medium and long-term investment recommendation: Prioritize buying stocks with poentially positive Q3 business results
Positive changes in stocks: HVN,POW,VRE,STB,VGI

Next week highlights              
• Preliminary information on Q3 business results of listed companies.
• The 11th Plenum of the 12th Central Party Executive Committee, with many important issues will close on October 13.
• With a lot of bad news before the US - China trade talks, imposition of tariffs will affect markets significantly.
• October 15, Australian monetary policy record; French CPI and German ZEW business sentiment. October 16, EU announced CPI index, trade balance, and 30 years bond auction in Germany; The US announced sales and reserves of crude oil. October 17, Australia's unemployment rate; UK retail sales; U.S. production index, construction permits, and unemployment benefits of the U.S. in October 18; third quarter GDP, manufacturing index, retail sales and unemployment rate of China; IMF meeting in 2 days.