The stock market last week had a positive recovery, but the contribution was mainly from large-cap stocks. Meanwhile, liquidity decreased sharply, reflecting investors' caution with the current trend.
The VN-Index once again tested the 1,230-point mark. And just like before, after just breaking through this resistance level, the market quickly “turned around”.
A notable development last week was that at one point the VN-Index broke through the important 1,200-point mark. However, this is still a very strong psychological support level and has pulled the cash flow back, helping the market recover.
However, the market's ability to break out is limited in the context of foreign investors continuing to net sell as it is now. Foreign investors unexpectedly returned to net buying 25 billion VND in the shaky session on November 22, breaking the rhythm after about a month of strong net selling of hundreds of billions to thousands of billions of VND per session.
However, including the past week, foreign investors continued to have a strong net selling week of nearly 5,500 billion VND, with the focus still mainly on bluechip and large-cap stocks, in which VHM shares were net sold of more than 1,500 billion VND.
Currently, the support zone of 1,180 - 1,200 points of the VN-Index is still considered a strong support zone and bottom-probing demand will appear.
In the past 2 weeks, the number of small and medium-cap stocks increasing in price has also increased more and more, and stocks that create a bottom price base often increase well from 20-30% (especially the double-bottom model group calculated on the weekly chart) and many stocks with good business prospects tend to exceed the peak. So the market is not really too scared.
According to experts, profits of listed Vietnamese enterprises are expected to grow by about 20% in 2024 and maintain the same level in 2025.
Prior to the recent correction, the stock market was reasonably valued at a forward P/E of 10x in 2025. Currently, the VN-Index is valued at a P/E of 12.9x, significantly lower than its five-year average of 17.2x. This is the lowest P/E in the past year and is generally considered attractive for long-term investors.
Looking back at history, the last two times VN-Index touched this valuation zone were around November 2023 and August 2024, equivalent to the score zones of 1,030 points and 1,170 points, respectively.
In both cases, we saw money flow immediately enter strongly and pull the index up in a V-shape and recover quickly. This time, when VN-Index approaches the low P/E zone and the important technical support zone, there is a high possibility that it will also create a balance around here.
Analysts say that the market is relatively difficult to predict when major macro policies have not been specifically issued. Meanwhile, the bottom-fishing cash flow is also somewhat "slowing down". Therefore, "bottom-fishing" may be quite risky for swing traders when the short-term trend of the market is still down. On the contrary, for investors who want to hold stocks for a long time, the market discounting to a reasonable price range will be a suitable opportunity for investors to increase their proportion, especially when many groups of stocks attracting liquidity are returning to their lowest valuations.
