VIETNAM STOCK MARKET: WEAK DOWN TREND

The Vietnam Stock Index (VNI) from the Ho Chi Minh Stock Exchange (HOSE) has been in a down trend since early January 2008. The index was trading around 900 points. The long term down trend is defined by the 90 day-day moving average and this average has been declining since early 2008. A down trend correction took place in July to September 2008 and the trend continues down. The VNI is currently at 307.13 points after rebounding from a low of 284 points.

The VNI remains in a down trend but a bullish convergence on the Relative Strength Indicator (RSI) and a declining voume shows that the down trend is weak. The RSI indicator continues to increase. This also suggests that the support low of 284 is well supported.

The VNI has been declining for the past 4 days and this is expected because the VNI was at the resistance level of the short term up trend channel and the Stochastic indicates that the VNI is overbought at 322 points.

In the longer term, the VNI is expected to climb higher with a short term target of 340 points and a more optimistic technical target of 380 points. However, expect the current correction to head towards the up trend channel support level at 300 points in the next few days.


Daily VNI Chart chart as at 13 January 2009 using NextVIEW Advisor. Click on chart to view enlarged chart.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.

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