The stock market is in bad shape, investors should not buy at the bottom.

The market unexpectedly fell sharply yesterday (October 26) amidst the VN-Index gradually forming a small accumulation base for recovery. The sharp decline caused the index to lose key support levels at 1,100 points and 1,070 points.

Negative news surrounding blue-chip stocks created overwhelming selling pressure throughout the trading session, coupled with the highest trading volume in a month, indicating a tendency for investors to panic.

The selling pressure that persisted almost throughout the session left the market with no opportunity to find any support. Perhaps the expectation will come from a "shakeout" session with a surge in liquidity and a rebound at the end of the session, which will help to make the short-term trend less negative.

The VN-Index has returned to its level at the beginning of 2023, while monetary policy remains loose, interest rates are low, and the business results of companies in the third quarter are gradually being announced and have shown a better trend compared to the first two quarters of the year.

From a short-term perspective, yesterday's sharp decline shows that the downward momentum remains strong, and the nearest support level for the VN-Index is the 1,015-1,045 point range. With the sharp drop, the market is currently oversold and could rebound at any time. However, any rebound is technical in nature and often ends unexpectedly and unpredictably.

According to experts at Tan Viet Securities Company, the VN-Index closed the session with a marubozu candlestick pattern, showing a very sharp decline accompanied by a downward gap and increased trading volume, signaling a very negative trading session. With the sharp drop, breaking through the short-term equilibrium zone and approaching the lower support level within the year's accumulation base, the market's medium-term trend has officially shifted to a downtrend.

With the current synchronized decline across all three timeframes, the index is in a negative state, and the chances of an immediate rebound are very slim. In the final trading session of the week, the expectation is that the index may narrow its decline to create a short-term recovery phase, retesting the previous equilibrium zone.

Experts at SHS Securities Company also expressed the view that the market has returned to its previous medium-term accumulation zone, and in the short term, the VN-Index may continue to decline. However, with the market in an oversold state, a technical rebound is possible, albeit with inherent risks. Short-term investors should temporarily stay on the sidelines and monitor market developments. Medium- and long-term investors can continue to hold their portfolios, waiting for the market to stabilize and accumulate again.

Vietcombank Securities Company (VCBS) recommends that investors proactively increase their cash holdings and maintain a defensive mindset rather than prematurely buying at the bottom at the present time. The VN-Index is still under significant pressure from net selling of many large-cap stocks and it will be difficult to find equilibrium in the short term.

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