Last week, VN-Index continued to test the psychological resistance level of 1,700 points for the third time after more than four weeks of accumulating sideways, but this effort was still unsuccessful. The biggest bottleneck is still the absence of new cash flow, reflected in weak liquidity and increased cautious sentiment.
One of the factors that has put significant pressure on the market recently is the prolonged net selling momentum of foreign investors. The foreign investor's ownership ratio has once again retreated to a historical low of around 16%, erasing the short-term improvement in July. This is not only a technical figure, but also reflects the reservations of foreign capital flows for the Vietnamese market, in the context that internal stories are not convincing enough to retain them for a long time.
However, in the positive direction, the selling intensity has cooled down. Although still maintaining a net selling status, the selling value is only over 700 billion VND/session on average, down nearly half compared to before. This shows that the sell-off momentum has declined, and foreign investors are no longer maintaining the strong divestment pressure as before.
The Vietnamese stock market has recently partly reflected important macro and technical factors such as the FED reducing interest rates, derivatives maturities or ETF portfolio restructuring activities. Therefore, from now until there is official information about the market upgrade, cash flow is expected to become more cautious, instead of maintaining a strong breakthrough like in the previous period.
This is a reasonable "waiting" development, when domestic and foreign investors both want to confirm clear policy signals before increasing the proportion.
Technically, the VN-Index is currently moving around 1,700 points - an important psychological region for the market. In reality, when cash flow shows signs of weakening and liquidity decreases, the pressure to adjust becomes more obvious. This makes the market's chance of a short-term recession quite high, especially when investor sentiment becomes cautious after the previous strong increase.
Commenting on market developments in the new week, experts from DSC Securities Company believe that the market will continue to fluctuate sideways within the range of 1,600 - 1,700 points. The factor that needs special attention is liquidity developments. If the liquidity shortage in the highlands continues, the VN-Index can enter a stronger correction to attract cash flow. The reason is that large groups of leading stocks such as banks, securities, and real estate all need liquidity to maintain a positive state.
Currently, these groups are weaker than the VN-Index when most have fallen below the 20-day moving average. If it cannot bounce back in time, this can be considered a warning sign that the general index will soon enter a clearer correction.
From the perspective of analysts at HSC Securities Company, in the short term, the VN-Index is likely to continue to fluctuate in the range of 1,600 - 1,700 points until more obvious catalysts appear. The upcoming notable milestone is October 7, when the market classification results are announced, along with the process of amending the Land Law, which will be discussed by the Government in October.
If these factors develop positively, the VN-Index can escape the accumulation state and establish a new, higher price level, opening up the next uptrend. In the opposite scenario, if the VN-Index adjusts below 1,600 points, this is not necessarily a negative signal. Conversely, lower prices may become an opportunity for new cash flow to accumulate.
