Stock market outlook for the week of February 26th.

Báo Đầu tư•25/02/2024

Stock market outlook for the week of February 26 - March 2: Short-term investors should exercise caution.

The short-term upward trend remains intact, and after breaking through the psychological resistance level at 1,200 points, the VN-Index has yet to retest this support zone.

After surging to the 1,235-1,255 point range, corresponding to the peak prices of August and September 2023, the VN-Index experienced a volatile trading week with three consecutive sessions fluctuating within a narrow range below the 1,235 point resistance level. Particularly, the final trading session of the week (February 23rd), the first session of 2024, saw dramatic fluctuations, with a sharp increase at the beginning of the session followed by a sharp decline at the end.

Specifically, in this session, bank stocks pushed the index up sharply at the beginning of the session to 1,240 points. However, selling pressure increased suddenly in the afternoon. The correction in large-cap and banking stocks was the main reason for the sharp decline in the VN-Index, with a very high trading volume of over 1.3 billion shares, indicating strong short-term selling pressure. At the end of the week, the VN-Index closed at 1,212 points, still above the psychological 1,200-point mark and slightly higher than the end of the previous week.

During the week, the total trading value on the HoSE reached VND 118,101 billion, a sharp increase, with an average trading volume of nearly 1 billion shares per session. The trading session on February 23, 2024, saw a trading volume of 1.327 billion shares, the highest since August 18, 2023. This development, combined with the sharp decline at the end of the week, indicates short-term distribution risks in many stocks/groups of stocks as the VN-Index fluctuated between 1,235 and 1,240 points. Foreign investors increased their trading activity during the week and sold net VND 1,456.6 billion on the HoSE; net selling on the HNX amounted to VND 39.69 billion.

As mentioned above, the banking sector significantly impacted the index, exhibiting divergent movements and a surge in liquidity, which stimulated short-term capital flows to increase trading activity. Many stocks continued to rise sharply, surpassing previous highs such as BID (+7.11%), VAB (+6.25%), TCB (+4.16%)..., while the majority declined, including LPB (-4.74%), HDB (-3.43%),OCB (-3.18%), EIB (-2.65%)...

In the final trading session of the week, many stock groups experienced sharp declines. Financial services and securities stocks mostly fluctuated within a narrow range, ending the week mostly lower, with TVB (-7.44%), APG (5.78%), VND (-4.96%), AGR (-4.34%)..., except for IVS (+10.68%), HBS (+3.85%)... Real estate stocks were also among the least positive performers compared to the overall market, with most declining and facing strong selling pressure in the final session of the week, such as TCH (-6.20%), DIG (-6.10%), PDR (-5.72%), ITC (-5.24%)..., except for some positive breakout stocks like CCL (+13.26%), VRE (+13.11%), PXL (+10.71%)...

The brighter spot was in industrial real estate and rubber stocks, which, despite strong selling pressure in the final trading session of the week, still ended the week with good price increases for many stocks, notably TIP (+6.83%), IDV (+6.70%), GVR (+3.38%)... in contrast to LHG (-2.87%), DPR (-2.72%), KBC (-2.70%)...

According to experts, this correction phase could be a healthy phase before the market balances out soon, thus presenting opportunities to increase stock holdings again. In addition, a key factor to consider is the increase in market liquidity, balancing both large-cap and mid-cap groups. Unlike early January 2024, when liquidity was concentrated and increased in the VN30 and blue-chip stocks, in the past 2-3 weeks, the increase in market points has been accompanied by a balance as capital flows seek opportunities in sectors outside of VN30 and banking.

From a short-term perspective, the market has approached the strong resistance level of 1,250 points and corrected accordingly. The psychological support level for the index is the 1,200-point area during this correction. Although the market still has the potential for a rebound, it should be noted that since Friday was only the first correction session, volatility is still expected.

In summary, although the short-term uptrend remains intact and after breaking through the psychological resistance level at 1,200 points, the VN-Index has yet to retest this support zone. Therefore, a slowdown and correction to retest this support zone is considered reasonable. Volatility and corrections are still likely to recur in the coming sessions, and short-term investors should be cautious at this stage, as the VN-Index is currently trading at a high point within its medium-term accumulation channel and has signaled a correction, thus increasing short-term risk.

Therefore, new buy positions should pay attention to these market changes to optimize trading positions instead of being influenced by emotions and FOMO (fear of missing out) affecting investment decisions. It is predicted that capital will continue to circulate around stock groups in sectors with positive fundamentals and growth potential in 2024, such as banking, industrial real estate, ports, chemicals, and oil and gas.

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