In yesterday's session (8.21), despite being under a lot of pressure due to the dominance of red, the strong wave from banking stocks helped the VN-Index maintain its upward momentum and at one point approached the 1,700 point mark.
However, entering this morning's trading session, August 22, the adjustment pressure has shown stronger and more decisive signs, when profit-taking supply is put into many industry groups, causing electronic boards to be dominated by red, while bluechips are no longer as prominent as in recent sessions to support the market.
At the end of the morning session of August 22, the VN-Index decreased by nearly 42 points, falling to 1,646 points. The VN30 basket lost up to 63 points with 28 codes down and only 2 codes up, close to the 1,810 mark. The HNX and UPCoM indices also closed at the lowest level in the session.
Liquidity matched for the whole market reached VND34,700 billion, of which selling pressure dominated. Foreign investors continued to net sell nearly VND1,370 billion strongly in this morning's session.
The number of stocks that decreased was overwhelming with more than 640 stocks, while the number of stocks increased to just over 150. A series of stocks lost over 6%, even falling to the floor. This condition occurs widely, covering the entire midcap group. On the other hand, some codes such as POW and bank stocks such as BID and VCB play a supporting role, helping the market to some extent avoid falling freely.
The market has begun to show the first signs of correction, having previously been increasing by nearly 190 points since the beginning of the month. Although the decrease was quite strong, in general the market did not show any low selling pressure, investors seemed to be only circulating cash flow, taking advantage of the market's cooling down to seek further opportunities.
According to analysts at MBS Securities Company, market valuations are no longer too attractive. The current P/E trailing of the VN-Index is currently at 15.3 times, the highest in the past 3 years and equivalent to an average P/E of 5 years.
Although the current valuation is still lower than in 2021 when VN-index was at 1,500 points, P/E trailing at 20 - 21 times, the valuation of the Vietnamese market is higher than some countries in the region such as Singapore (14.6 times), Malaysia (14.4 times), Indonesia (12 times).
Regarding technical analysis, MBS analysis department believes that the risk of short-term adjustment is increasing. This may be the period when the Vn-Index increases or decreases little but the stock portfolio has a large loss, meaning that the index reference may not accurately reflect the developments in the stock market.
The support zone for the market is in the 1,566 - 1,588 point area. MBS analysts predict that the VN-Index may "slow down" to this region by the end of August.
Regarding trading strategy, MBS believes that the market may enter a period of " indices going one way, portfolios going another way", in the context of liquidity being at a record high base and the increase of leading stocks is quite large, the cash flow rotation is even faster. Therefore, investors should limit new purchases of stocks that have increased a lot, focusing on stocks that have accumulated and have not increased in price in the past.
