The VN-Index is consolidating again in the 1,230-1,260 range.

Some stocks to watch on July 29th

Investors should remain cautious and be patient.

After a "dream" trading week at the beginning of July, the Vietnamese stock market experienced three consecutive weeks of correction, hitting its lowest point at 1,218 points last week. Strong selling pressure pushed the market down sharply in the first two trading sessions of the week, followed by attempts by investors to rebalance. Bottom-buying efforts helped the index recover more than 20 points from its weekly low. Large-cap stocks shared the same fate as mid-cap and penny stocks, with selling pressure spreading across the market and only truly easing in the final trading session of the week. Another notable point is the return of sluggish liquidity in the last two trading sessions of the week as caution prevailed in market sentiment. At the close of the trading week (July 22-26), the VN-Index closed at 1,242.11 points, down 22.67 points (-1.79%).

Liquidity last week decreased by 19.8% compared to the average of the past 20 trading weeks. For the entire trading week, average liquidity on the HSX reached 623 million shares (-17.46%), equivalent to VND 16,096 billion (-17.42%) in trading value.

At the close of the trading week from July 22nd to July 26th, the VN-Index closed at 1,242.11 points, down 22.67 points (-1.79%).

Demand showed signs of increasing in the final trading session of the week, but it wasn't strong enough to overcome the significant selling pressure in the first two sessions. Therefore, the number of declining sectors remained overwhelming last week (17 out of 21 sectors declined). Profit-taking pressure intensified in the Telecommunications Technology sector (-11.61%) after a period of rapid growth. The sector sensitive to market fluctuations, Securities (-6.02%), also saw significant selling pressure this week, followed by Chemicals (-5.84%), Textiles (-5.76%), etc. Those on the rise included Plastics (+2.66%), Pharmaceuticals (+0.97%), and Aviation (+0.72%), all of which are medium and small-capitalization sectors.

According to experts at Kien Thiet Securities Company (CSI), the downward trend shows signs of slowing down, but a reversal to an upward trend has not yet been confirmed, as the volume in the recovery sessions has decreased and remained very low. The positive point is that the VN-Index has tested the support level of 1,219 points and has risen quite well. The VN-Index is likely in a recovery phase, with expectations of reaching the resistance level around 1,255 points (the support level that was broken last week) before consolidating to form a new trend.

"At the present time, investors should still be cautious, patiently waiting for clearer signals before opening new buy positions and limiting selling after the VN-Index successfully held the 1,219-point support level," a CSI expert noted.

The VN-Index may form a base and consolidate again in the 1,230-1,260 point range.

According to the analysis team at VNDIRECT Securities Company, technically, the VN-Index shows signs of forming a short-term bottom and recovering after reaching its lowest point of 1,218 points in the past trading week. Notably, selling pressure has weakened significantly, while demand has shown slight improvement in the final trading sessions of the week. Entering the trading week of July 29th - August 2nd, the market trend may be confirmed as important information is about to be released, including: domestic macroeconomic data for July, updates from the Fed's end-of-July meeting on the interest rate cut roadmap, and the deadline for the release of Q2 earnings reports from listed companies.

The VN-Index may form a base and consolidate again in the 1,230-1,260 point range (Illustrative image: KT)

“In the base scenario, the VN-Index could build a base and consolidate again in the 1,230-1,260 point range during the trading week of July 29-August 2. With market valuations now more attractive, medium- and long-term investors can “begin building portfolios for the next 6-12 months,” focusing on sectors with improved business prospects such as Banking, Consumer-Retail, and Import-Export. Meanwhile, short-term traders need to wait for the market to “confirm the short-term trend” and “an improvement in cash flow” before increasing their stock holdings,” a VNDIRECT expert commented.

Meanwhile, experts at Saigon - Hanoi Securities Company (SHS) believe that, in the short term, the VN-Index is trending towards retesting the price range around 1,255 points, the highest price in 2023, as well as the current short-to-medium-term trend line connecting the lowest price levels of November 2023, April 2024, and July 2024. The short-term trend of the VN-Index remains unfavorable as it has failed to maintain the aforementioned short-to-medium-term upward trend line. In a positive scenario, the VN-Index needs to break above the resistance zone around 1,255 points, the highest price in 2023, to improve the short-to-medium-term trend. On the positive side, the market is highly differentiated, with many stocks showing positive price increases, aiming to surpass their previous peaks with strong Q2/2024 business results, such as some stocks in the industrial real estate, gas distribution, plastics, oil and gas transportation, and petroleum sectors... some technology stocks are also showing a tendency to recover to their previous peaks.

In the medium term, the VN-Index is consolidating in a less positive manner, similar to the short-term trend as it has failed to maintain the price trend line extending from November 2023 to the present, as well as the equilibrium price zone of 1,245 points - 1,255 points within the price channel of 1,180 points - 1,200 points to 1,300 points - 1,320 points. Consequently, the VN-Index shifted to a consolidation range of 1,180 points - 1,200 points to 1,245 points - 1,255 points, with 1,200 points being the highest price in 2018 and 1,245 points - 1,255 points being the highest price in 2023. If the VN-Index can break above the resistance around 1,255 points, corresponding to the highest price in 2023 as well as the current 120-day moving average, then the medium-term trend is still expected to return to the consolidation channel of 1,250 points - 1,300 points.

“In the short term, stocks that experienced strong corrections last week and early this week will take turns recovering as the VN-Index also rebounds to the 1,250-point level. Investors should maintain a reasonable, average weighting and avoid chasing the VN-Index when it recovers to around 1,250 points. For positions already invested around 1,250 points with high weightings, exceeding stop-loss levels if any, consider selling to reduce losses during the recovery. Medium- and long-term investors should hold their current portfolios, while those considering increasing their weighting should carefully assess the Q2 business results and year-end outlook of leading companies,” an expert from SHS recommended.

Source: https://vov.vn/thi-truong/chung-khoan/nhan-dinh-chung-khoan-297-28-vn-index-tich-luy-tro-lai-trong-vung-1230-1260-post1110583.vov