Waiting for VN-Index to escape the accumulation trend

Stock market outlook for the week of October 21-25: Waiting for the VN-Index to break out of its consolidation trend.

In the next 1-2 weeks, the VN-Index may break out of its current consolidation phase within a narrowing range.

After a week of recovery and gains around 1,265 points, the VN-Index fluctuated within a narrow range this week, facing selling pressure at the strong resistance level of 1,300 points, and recovering at the support zone around 1,275 points. At the end of the week, the VN-Index fell slightly by -0.23% compared to the previous week to 1,285.46 points, maintaining within the 1,280-1,300 point range.

Trading volume increased slightly compared to the previous week, but remained below average, reflecting strong market divergence during the period leading up to the release of Q3 2024 earnings results.

Experts at SHS Securities Company believe that the short-term trend of the VN-Index is reaching the final stage within a narrow price channel below the strong resistance level of 1,300 points that has lasted since the beginning of the year, and above the support zone corresponding to the upward trend line connecting the lowest price levels from August-September 2024 to the present.

In the next 1-2 weeks, the VN-Index may break out of its current narrow consolidation range. In a positive scenario, if the VN-Index maintains its short-term upward trend, it could potentially reach the 1,300-point resistance level. However, this is a very strong resistance zone corresponding to the peak prices of June-August 2022, as well as the beginning of the year. The VN-Index can only overcome this strong resistance in the near future when there is a consensus on growth across all sectors.

SHS experts recommend against chasing the VN-Index as it approaches the 1,300-point mark. Investors can wait for the overall market, with the VN-Index breaking out of its current short- to medium-term consolidation trend, and with confirmation of consensus growth across many sectors, before considering increasing new positions.

Investors should maintain a reasonable portfolio allocation, and carefully select high-quality stocks for their investment positions, especially as the market is currently receiving earnings reports. Investment targets should focus on leading stocks with strong fundamentals, positive Q2 earnings growth, and promising Q3 prospects.

The earnings season is showing divergence among different sectors. This also leads to a divergence in market capital flows, concentrating on sectors with positive news and high Q3 earnings growth, such as retail and livestock. Conversely, stocks of companies with declining profits will face downward pressure.

Agrisesco experts believe that this trend will continue in the coming sessions as the third-quarter earnings season enters its peak with many large companies releasing their reports. The banking sector is also expected to have positive business results, helping its stocks continue to attract capital and become a driving force for market gains. However, differentiation will occur between sectors and companies because the low base from the same period last year is no longer the main factor, making it more difficult to choose investment opportunities.

Notably, in the securities sector, the overall market trend has been sideways within the 1,200-1,300 point range with low liquidity. Consequently, securities stocks have also shown divergence, with companies experiencing profit growth in the third quarter, increased margin lending, or those with plans for capital increases showing more positive performance.

However, the securities sector has generally performed less positively than the overall market recently, due to relatively high valuations and a lack of significant improvement in index points and liquidity. Agrisesco believes that investment opportunities in securities stocks will only become truly clear if the market breaks out of the 1,300-point range and liquidity improves significantly. Investors should focus on companies with growth in margin lending or those with plans for future capital increases.

Source: https://baodautu.vn/goc-nhin-ttck-tuan-21-2510-cho-doi-vn-index-thoat-xu-huong-tich-luy-d227902.html