Signs of W bottom appear, stocks may soon recover

The stock market today (October 18) spent most of the time in red with increased selling pressure. The VN-Index fell 18.25 points, or 1.63%, to 1,103.40 points. The HNX-Index fell 1.27 points, or 1.27%, to 227.11 points.

Liquidity on the two exchanges reached VND24,417 billion, up 56.42% from the previous session. More than 1 billion shares were traded on HOSE, exceeding the average.

In the context of the general market adjustment, many stocks and industry groups took turns to decrease sharply. In particular, the construction and construction materials stocks had a less positive performance. Many stocks decreased to the limit with strong liquidity increase such as PLC (-7.90%), KSB (-6.93%), FCN (-6.81%), CII (-6.81%), LCG (-6.67%), PHC (-6.37%)...

Similarly, investors increased selling of real estate stocks such as DRH (-6.95%), ITC (-6.90%), DIG (-6.86%), NHA (-6.71%), SJS (-6.44%), HDC (-5.56%), DXG (-5.49%)...

The highlight today is that financial services and securities stocks recovered quite well with many codes increasing slightly such as VIX (+3.85%), MBS (+1.96%), SHS (+1.85%), VND (+0.75%)...

Foreign investors were active in the market decline session, net buying VND557 billion on HOSE. They also net bought VND14 billion on HNX.

With the current score, VN-Index has returned to the old bottom of early October of the recovery period. According to experts from SHS Securities Company, the end-of-session performance opens up hope that the general index can form a reliable W bottom if the market recovers in the coming sessions. Short-term investors with high risk appetite can consider buying with a low proportion if VN-Index shows signs of recovery in the coming sessions.

In the medium-term perspective, VN-Index confirmed that the uptrend has ended and is looking for a new balance zone to accumulate again with an expected time of long duration. SHS expects the formation of a new base to be around 1,100 - 1,250 points. In the worst case scenario with low probability, the market will accumulate around the previous medium-term base zone of 1,000 - 1,100 points. Medium- and long-term investors can continue to hold their current portfolios and wait for the market to stabilize again.

From a technical perspective, VCBS Securities Company said that the indicators on both daily and hourly charts are pointing down negatively, indicating that selling pressure may still continue. According to Elliott wave theory, if selling pressure continues to increase, VN-Index will enter impulse wave 3 and may completely decrease to the 1,085 area and further to 1,070 points. In a more positive scenario, today's decline will be considered an oversold session, falling below support.

VCBS believes that investors should not abuse leverage, patiently observe market developments in the coming sessions and limit early bottom-fishing disbursements at this time. At the same time, they should adhere to investment discipline and reduce the proportion of stocks that have fallen below the support zone after a series of three recent declines.

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