The stock market unexpectedly had a sharp decline in trading session when investors pushed up their sell-off orders in the last minutes of yesterday (March 5). The VN-Index had a declining session due to short-term profit-taking pressure.
The general sentiment is cautious, but not too negative. Most stock groups are still trading around the accumulated base after the recent price increase.
Analysts from CSI Securities Company believe that with the somewhat negative developments in yesterday's session, it is likely that the VN-Index will continue to adjust in the coming sessions to towards the support level of 1,288-1,290 points. However, the uptrend according to CSI experts is not broken, but in the short term it is quite risky for new buying positions.
Asean Securities Company said that the stock market is continuing to create a consolidation foundation on the 1,300-point resistance zone to wait for a breakthrough with high liquidity, thereby creating momentum for strong growth in the long term. However, it is not ruled out that the market will have fluctuations in the coming time due to uncertainties related to the international market.
With the market having gone through a period of consecutive increases for 5 weeks and cash flow moving rapidly through industry groups, it is understandable that a profit-taking trend will be formed.
Cash flow in the market in the current period tends to rotate rapidly between industry groups, instead of focusing on one field as in previous waves. Previously, cash flow often flowed strongly into some key industry groups such as banks, securities, real estate or stocks that benefited from policies.
However, at present, there is not a strong enough story to retain cash flow in any industry group for a long time. This leads investors to tend to trade in the short term, applying a quick-taking strategy instead of holding for a long time, making cash flow sensitive to market fluctuations.
When one group of stocks shows signs of weakening, cash flow quickly shifts to other groups, reflecting a lack of confidence in a sustainable uptrend. Currently, market liquidity is still quite good but there has not been a clear explosion. Large cash flows from organizations and investment funds are still cautious, not really disbursing strongly to one industry group.
In addition, the continuous withdrawal of foreign investors has made investors more hesitant in trading decisions. In general, the current cash flow movement shows investors' caution, with flexible trading strategies, taking advantage of short-term waves instead of betting on a certain industry group in the long term.
Dr. Nguyen Duy Phuong, Investment Strategy Director of DG Capital, said that in case the VN-Index fluctuates below 1,300 points, investors can proactively buy stocks with good fundamentals, prices not yet increased or increases not commensurate with the general market movement. The movement of cash flow will gradually push the price level up, which minimizes the risk of a short-term peak with stocks increasing if they continue to buy according to FOMO psychology.
In case the VN-Index breaks out and creates a safe distance of 10 points from the 1,300-point threshold, investors can increase their proportion in stocks that have established trends and still attract cash flow to take advantage of the general trend according to the strategy of "investing in stocks with strong trends".
