In the past week, the VN-Index showed a remarkable technical recovery when approaching the resistance zone of 1,680-1,700 points, but demand quickly weakened and investors' caution returned. This is a signal that short-term cash flow is not strong enough to create a sustainable trend.
VN-Index closed the week at 1,658.62 points, down about 0.52% compared to the previous week, liquidity is a notable deduction when the average trading value decreased by about 9% compared to the previous week and decreased by 13% compared to the 20-week average.
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.
The Fed's interest rate cut has opened up expectations of reducing exchange rate pressure, but this factor needs a long time to penetrate to see the impact on foreign capital flows into the market. Domestic cash flow is still cautious about information about upgrading results or upcoming Q3 business results.
Dr. Nguyen Duy Phuong, Investment and Strategy Director of DG Capital, said that cash flow does not necessarily weaken in the entire market. General liquidity decreased but some industry groups still kept trading positively such as Construction Materials. This shows that cash flow is more differentiated and selective.
The third quarter is also nearing the end and some new expectations for businesses will appear. When the business picture is clear, it will add momentum to the market. In addition, the approaching FTSE Russell classification results announcement period is also a good catalyst if the results are favorable, Dr. Phuong commented.
Regarding the market's trading trend, experts say that in the coming trading week, the market is likely to fluctuate within a narrow range with a fluctuating trend, instead of a breakthrough.
Technically, the VN-Index has repeatedly assessed the 1,680-1,700 point zone but has not been successful, which has turned the above area into a strong resistance zone. On the contrary, the nearest support zone is around 1,640-1,650 points, if it breaks through this mark, selling pressure may increase. VN-Index is likely to re-evaluate the 1,600-point mark, even breaking through this threshold. Therefore, investors should prioritize risk management strategies, avoiding FOMO buying during recovery periods with low liquidity.
Experts say that the 1,610-1,620 point area is considered an important support level, where bottom-fishing demand can be activated back. This is also an area that has recorded good accumulation in previous adjustments, so it is expected that when the VN-Index approaches this area, the market will have a significant recovery.
In the positive scenario, after successfully assessing the support zone, the VN-Index is fully capable of re- jumping and attaining the 1,700-point mark. This development is not only technically meaningful, but also plays an important role in strengthening cash flow sentiment, helping the market regain balance and opening up breakthrough opportunities in the next phase.
