Stock liquidity will improve as stock valuations become attractive

Continuing the recovery momentum, in the first trading session of the new week, the VN-Index closed up with a Marubozu candlestick pattern with the closing price at the highest level of the day, confirming the continuation of the previous recovery momentum.

The downside is still low liquidity and the increase is mainly due to the pull of pillar stocks.

The current index continues to maintain at the upper resistance zone of the year-earlier sideways range and is about to challenge the resistance level which is the convergence of the accumulated sideways week in mid-October with the 20-session average around the 1,095-1,100 point threshold.

This is the first strong resistance zone that the index will face and if it successfully breaks through, the short-term trend will turn bullish.

The market is making an effort to recover as the valuation of the VN-Index has been discounted to a more attractive level. Meanwhile, the general economy, although still facing many difficulties, is gradually improving as support policies penetrate deeper.

The possibility of the market establishing a new short-term bottom this November is very low. Experts are also expecting that the VN-Index will stabilize at the price range of 1,100 points and from there have a recovery period.

The above expectation is based on three factors: First, the macroeconomic context is not really favorable, but there are no systemic risks; second, liquidity and exchange rates are both reaching a new stable state; third, most listed enterprises have announced their financial reports for the third quarter of 2023, so the impacts of this business results reporting season have been reflected in stock prices.

Experts from CSI Securities Company believe that the VN-Index is approaching the resistance zone of 1,090-1,100 points and there is a high possibility that profit-taking pressure will appear. There is a high probability that fluctuations will appear in tomorrow's session.

However, positive signals from the market in recent sessions are gradually showing that a recovery trend is forming.

Experts from VietCap Securities Company predict that in today's trading session (January 7), VN-Index will continue to increase in price to test the MA20 resistance at 1,095 points.

Profit-taking selling pressure after consecutive increases may be driven by resistance and create a tug-of-war in the market. Therefore, VietCap does not rule out the possibility that VN-Index will experience a downward correction session to test support at 1,065-1,083 points.

However, if buying power remains strong and helps VN-Index surpass MA20, the index could head towards MA200, the boundary of the bear market zone, at 1,110 points.

SHS Securities Company also believes that, from a short-term perspective, the strong recovery effort reinforces the view that the market will not return to a downtrend, and the next trend of the market is completely capable of continuing the technical recovery momentum to reach the resistance level at 1,100 points.

However, VN-Index is still searching for a new balance area in the old accumulation zone and the short-term risk is quite high, because the index has lost its uptrend, so technical recoveries often end unexpectedly and are difficult to predict.

For medium and long-term investors, the market is still confirmed to have passed the downtrend bottom at 950 points, although the uptrend is currently over, but there is a high possibility that the market will enter the accumulation zone again.

Therefore, long-term investors do not need to worry too much, they can wait for the opportunity to disburse more when the market accumulates and stabilizes again.

Source