Stock market continues to recover

The stock market continued to experience a week of strong fluctuations at the lowest level of 1,138 points, the VN-Index ended the last session of September at 1,154 points, down nearly 39 points, equivalent to 3.26% compared to the previous week. Liquidity also recorded a sharp decrease when there were sessions with total transaction value reaching only 13,000 billion VND.

The decline last week was the result of the continuous price increase in the previous period, causing many groups of stocks to fall into a state of expensive valuation. The factors causing the decline mentioned are not new, but they appeared in resonance and were over-inferred, causing many groups of stocks to be sold off.

The sharp increase in the USDX index has negatively affected international stocks because investors are disappointed that major central banks such as the FED and ECB still maintain tightening policies to keep the "expensive money" era longer than expected. The Fed believes that interest rates until 2026 will still be higher than the "neutral" level. In addition, the market has increased for 8 consecutive months to the Top best channel in 2023, which also makes the profit-taking move stronger.

Therefore, according to some experts, in the short term the market may recover but will not temporarily return to the growth trend of the first half of the year.

Observing the last two sessions of the weekend, it can be seen that the market has gradually become more stable and is accumulating to wait for further information.

Next week, the market is likely to move sideways with low liquidity and alternating up and down trading sessions. The level of volatility in each session may be large and clearly differentiated between groups of stocks.

Further, regarding the October market, the story of third quarter business results as well as the progress of public investment implementation and the effectiveness of economic support policies will be the main focus.

Considering the low base of the same period in 2022, there will be many groups of stocks with good business results in this third quarter and support the market.

VietCap Securities predicts that in the next session, selling pressure from the resistance zone of VN-Index at 1,165 points may prevail again. At that time, the index will decrease and retest the nearest bottom at 1,137-1,145 points. If selling pressure increases more strongly and breaks this support zone, the downtrend of VN-Index will continue with the next target of 1,100-1,105 points. In a scenario with a lower probability, if the high-price buying pressure improves and helps VN-Index close above 1,165 points, the index will extend its recovery to the 1,190 point zone.

SHS Securities Company believes that the market is in the second short-term correction phase when it encounters the resistance level of 1,250 points. The correction phase is necessary, however, the recent correction amplitude is wider than expected and weakens the short-term growth momentum.

Therefore, the market will need more time to form a new accumulation base, so it is very likely that the upcoming recoveries will only be technical recoveries accompanied by corrections to gradually form a tighter foundation.

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