Market comment – Aug. 22

The markets came tantalizingly close to a major breakthrough Friday but pulled back toward the end of the day as selling pressure remained fairly high. We opened very brightly and most stocks went to the ceiling led by financials.

However follow-up buying died off somewhat while selling pressure remained steady during the second session and the markets both eased back towards the end of trading.

Volume on the combined exchanges hit record levels Friday although foreigners were only slight net buyers and their overall contribution was marginal. Given the momentum in the market at the close the balance is still firmly on the positive side. However we might have to spend a few days around current levels as there is still some selling pressure to be absorbed before we can attempt to move through the current resistance level.

It’s important to keep a close eye on high beta stocks such as the brokers, REE, SAM, NTL and HPG. Financials had been quiet for a week or two but sprang back to life Friday. If they can take the leading role again early next week then the market will surely follow suit and we will have a breakthrough. Somehow the chance of this happening seems to be fairly high. One reason is that investors still seem quite cautious which to us, is actually a very positive sign. It means they are holding some cash back and can still invest more money in the market if it goes higher.

Fiachra Mac Cana,

Head of Research at HCMC Securities Corp.

thanhnien

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