VN-Index drops sharply, has it reached the bottom?

The market experienced a volatile trading week with increased active selling pressure. Despite a slight recovery at the end of the week, the VN-Index still closed the new week down 47.41 points, equivalent to 4.28% compared to the previous week, to 1,060 points.

Notably, in the trading session on October 26, strong selling pressure appeared on the group of stocks belonging to the Vin family such as VIC, VHM, and VRE, causing the entire market to fall into a state of strong sell-off. Of which, the trio of stocks of the Vingroup family contributed 6.8 points to the overall decline of the VN-Index, although these are also 3 large-cap stocks in the VN30 index basket. In addition, VHM was net sold by foreign investors for VND236.7 billion, VIC for VND115.5 billion.

Explaining this situation, Mr. Nguyen Trong Minh - Head of Brokerage Department, Yuanta Vietnam Securities Company - Co-Founder of BigStock, Asset Management and Mr. Do Minh Quang - Science and Technology Consultant, VPS Securities Company both commented that VN-Index is still in the process of establishing a balanced score zone.

Nguoi Dua Tin : The market experienced a volatile trading week with increased selling pressure causing the VN-Index to lose a series of important support levels. What is your assessment of the developments last week?

Mr. Do Minh Quang: Last week, the market witnessed a strong decline, the retreat and recovery at the end of the week caused the weekly decline to only 45 points. Looking back, the market peaked around 1,250 and started a downward trend from the trading session on September 22.

The reason for the decline, in my opinion, is due to the influence of macro factors such as the conflict in Ukraine and the Middle East, along with the pressure on the USD exchange rate compared to the domestic VND. Overall, in my opinion, this is just a continuation of the short-term downtrend before the return of large cash flows.

Mr. Nguyen Trong Minh: The past trading week can be described with two words "surprise", especially in the session of October 26, a series of VHM shares were placed on the floor price with a very large volume, leading to panic and selling pressure spreading throughout the market, causing the VN-Index to drop sharply.

In addition, the sharp decline of many stocks also triggered a wave of Margin Call in the market. Although the market recovered strongly at the end of the week, many stocks had bottom-fishing volume, however, the market's downward trend has not changed. Margin Call pressure is still high and there is not much information to support the market. Therefore, next week, VN-Index will continue to fluctuate strongly to find a balanced score zone and create a bottom.  

VN-Index technical analysis chart (Source: FireAnt).

The Messenger : Has the market entered a downtrend? Does the VN-Index still have a chance to recover from now until the end of the year?

Mr. Do Minh Quang: The market has been in a short-term downtrend at the present time. However, from a medium and long-term perspective, the market will certainly continue to grow and short-term declines can be considered as corrections for the medium and long-term trend.

The opportunity for VN-Index to recover in the last months of the year and early next year is completely reasonable with the Government's policies to stimulate the economy, as well as the fact that we are still in a low interest rate environment and there are no clear signs of a reversal in monetary policy. On the other hand, many stocks with good fundamentals are returning to attractive valuations due to the general downward pressure from the market, which is expected to grow strongly when the market stabilizes again.

Mr. Nguyen Trong Minh : Currently, VN-Index is still in the process of establishing a balance point zone and accumulating before forming the next long-term upward trend. During this process, the market will form alternating short-term waves.

In the short term, VN-Index is in a downtrend and there is no sign of bottoming out. Usually, the market will bottom out when there is a series of margin calls.

The Messenger : What is the direction of action for investors at this time, in your opinion?

Mr. Do Minh Quang: The strategy for current investors depends a lot on the account status. I think risk management for the current holding side is too late, but the important thing is to draw experience later.

In my opinion, investors with a high cash ratio should come up with a strategy to accumulate stocks for the medium and long term, because many stocks on the market are at attractive P/E and P/B levels, the decline in points of stocks with good fundamentals is just a general downward pressure on the market.

Mr. Nguyen Trong Minh: Recommendation for investors in this situation, in my opinion, in the short term, the market fluctuates strongly, margin calls will be an opportunity for short-term speculation. To speculate in the short term, investors must use strong enough trading support tools and absolute discipline.

For growth investors, the period from now until the end of the year will continue to be a difficult one, most stocks will not form a clear trend and stocks with extraordinary profit growth are also very rare. However, there will still be businesses that overcome difficulties to grow profits, these stocks will be especially prominent when their cash flow is stronger than the general market.

For value investors, many good stocks have been discounted very strongly, so this will be an opportunity for value investors to implement a capital-discount Swing trading strategy .

Source: https://www.nguoiduatin.vn/lang-kinh-chung-khoan-3010-vn-index-giam-sau-lieu-da-toi-day-a633396.html