The stock market is struggling, waiting for an opportunity to overcome the old peak.

The stock market is in a challenging transitional phase with strong differentiation, declining liquidity and a prevailing cautious sentiment.

At the end of the trading week, VN-Index recorded a slight increase of 0.13%, closing at 1,660.70 points, remaining above the important psychological support zone of 1,600 points. (Photo: Vietnam+)

The stock market has just experienced a week of cautious trading and differentiation between industry groups, reflecting investors' hesitation in the face of macro and internal factors. In the context of shrinking cash flow and continued net selling by foreign investors, making the right investment decisions becomes even more urgent.

After the previous week of decline, when the market was under selling pressure at the old peak of 1,700 points, VN-Index continued to experience a week of trading fluctuations within a narrow range with a clear tug-of-war trend.

According to Mr. Phan Tan Nhat, Head of Analysis Group of Saigon- Hanoi Securities Company (SHS), in the first sessions of the week, the index was under pressure to adjust to the price range around 1,620 points before recovering slightly, but with a high level of differentiation and liquidity maintained at a low level.

At the end of the trading week, VN-Index recorded a slight increase of 0.13%, closing at 1,660.70 points, remaining above the important psychological support zone of 1,600 points. However, VN30 index continued to decrease by 0.37% to 1,852.65 points, below the old peak resistance zone around 1,880 points.

The market last week showed a breadth of correction and accumulation. Sectors recorded positive developments, such as construction, along with recovery in insurance, oil and gas and industrial zones. On the contrary, many key sectors were under significant adjustment pressure, such as technology-telecommunications, steel, retail, ports, real estate, securities, fertilizers-chemicals. This differentiation reflects the cautious sentiment of investors in the absence of clear opportunities and partly because the market is at the end of the third quarter with activities of closing NAV (net asset value) of funds and closing credit balances at the end of the quarter.

Market liquidity was one of the most notable points last week when it decreased for the second consecutive week. Specifically, trading volume on the HoSE decreased by 9.9% compared to the previous week, reaching an average of 910 million shares/session, significantly lower than the average of 1.67 billion shares/session in August. In addition, weak cash flow showed the reticence of both buyers and sellers.

In addition, foreign investors continued their net selling trend for 10 consecutive weeks. During the week, the net selling value on the HoSE reached VND7,355 billion. Since the beginning of the year, the total net selling value of foreign investors has reached VND96,522 billion, surpassing the net selling volume of the previous year. This capital withdrawal pressure has created a great burden on the psychology and general market developments.

Less active accumulation

Mr. Phan Tan Nhat of SHS commented that the short-term trend of VN-Index is currently accumulating less positively under the resistance zone around 1,665 points, corresponding to the average price zone of 20 sessions. Many stocks, after peaking at the end of August, have gone through a period of adjustment and accumulation, and are currently trying to overcome the short-term downtrend.

However, Mr. Nhat warned that most will try to recover near the old peak and may face selling pressure again. VN-Index is expected to retest the price zone around 1,680 points, corresponding to the price zone in early September. The market is fluctuating in a narrow range after a period of strong price increase.

In the longer term, Mr. Nhat believes that the VN-Index is accumulating after a period of strong price increases, surpassing the historical peak in 2022.

"For the VN-Index to improve, the market needs new growth momentum. This is based on fundamental valuation factors, growth prospects in the final period of the year and a cautious assessment based on the expected business results in the third quarter of this year," Mr. Nhat emphasized.

“In the current market context, many stocks after about a month of adjustment are at a relatively reasonable price range. Investors can consider accumulating with the expectation of good growth in business results in the third quarter and at the end of the year. However, supply pressure may increase, many stocks will be under short-term selling pressure when heading towards the old peak. Therefore, investors can increase buying when the VN-Index heads towards the price range of around 1,680 points - 1,700 points," Mr. Nhat recommended.

Describing the developments of last week with the phrase "green on the outside, red on the inside" in the last two sessions of the week, analyst Nguyen Thai Hoc of Pinetree Securities Company pointed out that the two codes VIC and VHM contributed more than 14 points to the VN-Index, but the index only increased by a mere 3 points. This reflects the increase in points concentrated on a few pillars instead of spreading widely.

Regarding technical analysis, Mr. Hoc said that at the beginning of the week, VN-Index continued to decline from last week, but on Tuesday the index created a " Doji candle" - reflecting the indecision of supply and demand and showing that market support had appeared. On Wednesday, although VN-Index was under strong selling pressure in the early morning session, it rebounded strongly in the afternoon session, closing with a "Marubozu candle" with an upward momentum, showing the dominance of the buyers. In the last two sessions of the week, the market mainly accumulated, bringing the index back to the area around the 10-day and 20-day moving averages."

However, Mr. Hoc commented that the current market trend is still difficult to predict when liquidity remains low. This reflects the current sentiment as well as the reluctance of new investors to participate because they think the current price range is quite high, while investors who are holding do not want to sell. Regarding the industry group, real estate and public investment recorded a clear recovery, but capitalization is not large enough to create momentum for the index. In fact, the recovery of VN-Index is still mainly thanks to the banking group, when many stocks in this group showed technical reactions after reaching the 50-day average threshold.

Commenting on the upcoming trading week, Mr. Nguyen Thai Hoc said that the trend of VN-Index will be quite difficult to predict when the market is in a state of tug-of-war, liquidity is declining and cash flow has not yet clearly spread. However, this situation is unlikely to last and it is highly likely that the banking group, after more than 10 sessions of accumulation with low liquidity, will soon give a clear trend signal, thereby deciding the next direction of VN-Index.

Mr. Hoc proposed two scenarios: "It is not impossible that next week there will be no new factors that will increase demand, so the VN-Index may have to fall back to around 1,600 points to attract investors who are on the sidelines to participate in the market, but according to this scenario, the VN-Index will also find it difficult to fall too deeply. In the positive scenario, banking stocks are likely to be in the process of forming a short-term bottom, thereby supporting the VN-Index to maintain its price base and opening up opportunities to challenge the old peak in the near future."

Source: https://baolangson.vn/thi-truong-chung-khoan-giang-co-cho-doi-co-hoi-vuot-thach-thuc-dinh-cu-5060178.html