It seems that the short-term psychological knots that have not been resolved combined with selling pressure that has not shown signs of exhaustion have led to the continued correction of the stock market last week.
The downward trend in recent days has caused the market to continuously lose important support levels.
VN-Index retreated to near the 1,230 point mark with the widening of the price decrease range of many stock groups, especially large-cap stocks.
With the alternating support demand from banking stocks, VN-Index temporarily maintained a balanced state above the 1,240 point mark.
However, the climbing performance of the USD index (DXY) is also directly affecting banking stocks.
Meanwhile, liquidity is still a problem for the market when there are sessions where the transaction value on HOSE only reaches over 6,000 billion VND, the lowest level in the past 5 years.
This development has made many experienced investors apprehensive. The low liquidity clearly shows that investors are not ready to return to the market even though many stocks have already had strong discounts to attractive levels.
Commenting on the issue of market liquidity, Dr. Nguyen Duy Phuong, Investment Director of DG Capital, said that reduced liquidity is a worrying factor, but it is also a cyclical factor.
Every time the Lunar New Year holiday comes, market liquidity usually shrinks and liquidity only starts to improve from March onwards.
"If we expect liquidity to improve at this time, it is probably only when the market is down and in reality this is not what investors want. Basically, it is very difficult for us to expect any breakthrough factors to help liquidity increase at this time," Dr. Phuong stated his opinion.
In the new week, the stock market is expected to still face a lot of pressure due to the expiration of futures contracts and the restructuring of funds according to VN30.
Basically, the proprietary trading block is still holding a short position on index futures contracts while there is a synergy from net selling of banking stocks during the VN30 restructuring period, so the main trend predicted by many experts is probably still to maintain a downward adjustment.
Analysts from SBS Securities Company expressed their opinion that VN-Index, after losing the important support level at 1,250 points, has turned negative.
Therefore, it is likely that the downtrend will still be dominant next week. In addition, this trading week may be the peak of Tet holiday withdrawal activities, so the expected increase in selling pressure will put pressure on the trend, VN-Index may head towards the next support level in the 1,200-1,210 point area.
Yuanta Securities Company commented that currently, the 1,230 point level is considered an important support zone for the VN-Index, especially as indicators are falling into the oversold zone, so there is a possibility that the market may experience a technical recovery next week.
However, the bottom formation sign has not yet formed, so the short-term risk remains high and if the DXY index continues to increase strongly and exceeds 110 points, the VN-Index may also continue its short-term decline and head towards the next support level of 1,200 points.
In the current context, many analysts believe that the VN-Index may face selling pressure from the beginning of this week, falling to the support level of 1,210 points.
However, if this adjustment occurs, it will be similar to the previous 3 adjustments in 2024, that is, the market will soon find a balance point in the 1,200 - 1,210 point range.
The earliest balance will likely come by the end of the week, coinciding with the start of most fourth-quarter 2024 earnings reports.
