VN-Index has just experienced a volatile trading week, reversing from the 1,875 point zone in the first session of the week and losing the 1,800 point threshold in the last session of the week.
The recovery waves in the past week mainly relied on some large-cap stocks, while market breadth and cash flow strength have not improved correspondingly. Liquidity in general decreased, often lower than the 20-session average, reflecting cautious sentiment and the absence of active buying cash flow.
In terms of points, the 1,780-1,800 point area is reference support; the 1,810-1,820 point area is near resistance and the 1,850-1,870 point area is stronger resistance. However, holding or exceeding these levels is only meaningful when breadth improves, the number of stocks holding the price base increases and cash flow returns to groups outside VIC, VHM. If the index recovers thanks to a few large-cap stocks while the number of declining stocks is still overwhelming, that is the stability of the points, not the recovery of the market.
A reliable support zone is confirmed when liquidity shrinks in declining sessions, expands in recovery sessions and many industry groups maintain the trend. Conversely, real resistance lies in the amount of supply hanging in the foundation areas that have been broken. If stocks continue to be distributed, the recovery phases lack liquidity and the leading group successively loses ground, the risk of correction is still high even though VN-Index has not broken a specific point mark.
In the context of market correction, the story of upgrades is still a noteworthy support for cash flow in September. The fact that Vietnam was officially upgraded by FTSE Russell from September 21, along with many stocks being added to the index sets, is creating expectations for the increase of international capital flows. As the upgrade time approaches, the new trading week may be the period when the market reflects more clearly the expectations for cash flow disbursement and portfolio restructuring of funds, thereby supporting psychology and creating motivation for the benefiting stock group.
Although actual capital flows are likely to be allocated in stages, funds preparing portfolios before the effective date may help market sentiment become more positive. This is also a factor maintaining differentiation, as cash flow tends to prioritize stocks added to the index sets and meet the requirements for liquidity and capitalization.
In the opposite direction, the international environment still contains volatile factors, especially oil prices and the Fed meeting this week. If the Fed raises interest rates, the USD is likely to strengthen, creating pressure on the USD/VND exchange rate and may cause foreign investors to continue to withdraw capital from emerging markets, including Vietnam - thereby negatively affecting investor sentiment in the short term. Conversely, if the Fed keeps interest rates unchanged, exchange rate pressure will ease and create room for more stable foreign capital flows.
The trading week from September 14-18 also simultaneously takes place with the maturity of derivatives and portfolio restructuring activities of ETF funds. In such weeks, cash flow often maintains a state of waiting. Fluctuations may increase locally in the group of stocks that greatly affect the index and in the ATC session, but the weekly amplitude is usually not too large. The probability of sustainable liquidity improvement is therefore quite low.
VN-Index is forecast to likely continue to fluctuate and seek balance in the 1,800-1,850 point area when liquidity decreases, the leading group lacks consensus and peripheral pressure is still present. If closing below 1,800 points, the risk of adjustment will increase. Investors should maintain a reasonable proportion, limit chasing purchases in recovery phases and proactively restructure stocks that have increased sharply or weakened in trend. New disbursement should be implemented in installments when the market successfully tests the support zone, prioritizing stocks with a tight price base, improved liquidity and relatively good strength belonging to technology, oil and gas and some bank stock groups.
