This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Target VNM as Vietnam Inflation Eases

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By David Gillie

NEW YORK ( ETF Digest) -- For those of you in my generation, the thought of Vietnam brings up visuals of military carnage as seen on the nightly news of the 1960's. But that's history. The Vietnam of today is a tourist destination.

Yet, this small Southeast Asian country is still at war -- with inflation. Nearing 20%, inflation crushed the Vietnamese economy in 2011. The Vietnamese government has recently taken strong and decisive action to curb inflation and return Vietnam to its previous prosperity.

Vietnam falls into the emerging markets sector. Two of the largest emerging market's ETF's Vanguard's (VWO) and iShares (EEM) do not list Vietnam among their top 10 holdings geographically. I have not found any Vietnamese stocks listed on the NYSE.

Follow TheStreet on Twitter and become a fan on Facebook.

Market Vectors Vietnam ETF (VNM) is the best way for investors to gain exposure to this truly emerging market.

VNM's holdings are weighted in financials at 42.5%. Energy comprises 26.5% of this ETF with industrials 12%, materials 7.7% and consumer goods 9%. Although financials dominate, this is a diversified ETF and typical composition of an individual country index.

Average volume of 138,000 shares daily would not be considered heavy, but it is by no means illiquid or "thinly traded." What's important in the table is relative volume has traded at 2.4 times the norm. Somebody is showing a lot of interest in Vietnam -- rightly so. With 40% off the highs, VNM has a lot of room to move.

The Money Flow Index shows that buyers have come in strong after the December lows. Even more encouraging, the price has broken out of the descending wedge pattern and has made a higher high for the first time on the chart. The +/- Directional Index confirms that the bulls have made a decisive break out.

To test this price action as a true trend reversal, we need to see a pullback and a buildup of support. A pullback to $16 (the higher high-breakout point) and recovery would be an ideal indication of a turnaround in Vietnam.

Catching a bounce at $16 to ride VNM up to its May 2011 highs would be nearly a 50% gain. Not bad for a "war torn" nation.
At the time of publication, the author had no positions in any of the stocks mentioned, although positions may change at any time. This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
VNM $14.54 0.00%
AAPL $93.64 0.00%
FB $118.57 0.00%
GOOG $698.21 0.00%
TSLA $241.80 0.00%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs