The stock market has just experienced its second consecutive week of sharp decline with the VN-Index falling sharply from the 1,900 point zone to the 1,650 - 1,680 point threshold. Strong selling pressure is clearly shown through long solid red candlesticks accompanied by a sudden increase in trading volume, reflecting the anxiety of the majority.
The sharp decrease in the past week mainly stemmed from a sharp increase of more than 20% in domestic and world oil prices in the face of tensions in the Middle East region when Iran blockaded the Strait of Hormuz, combined with the phenomenon of simultaneous margin calls at most securities companies.
However, a bright spot began to appear in the lower support zone when liquidity was maintained at a high level but the price decrease showed signs of slowing down, and no further deep price decreases appeared. This is an important technical signal showing that demand is starting to participate in absorbing low-price supply, creating a premise for a short-term bottom zone.
Historically, after sharp declines causing oversold status, VN-Index usually has 1 to 2 weeks of technical recovery to rebalance supply and demand. Therefore, many experts believe that the most feasible scenario for next week is a short-term recovery.
MB Securities Company gave its opinion that this will be the stage when the market seeks a balance point, the index is likely to retest the support zone of 1,600-1,650 points. If this retest is successful, the index recovers with improved liquidity and breadth, and a leading group appears to pull market sentiment back, then it can be expected to have a clearer recovery phase in the next stage.
Analysts at Pinetree Securities Company said that the fact that the oil and gas group is being dumped despite oil prices recovering shows two positive signals at this time. First of all, cash flow withdrawn from here may shift to the remaining industry groups. Besides, the trend of the market in the coming time will depend more on the internal situation.
In addition, March 19th is the time for the meeting of the FTSE Russell Policy Advisory Board, or investors are still known as the review event to upgrade the Vietnamese stock market.
Accordingly, VN-Index may return to test bottom 2 before sending a clear recovery signal. Investors need to observe the 1.650 point mark, VN-Index may test bottom 2 around the 1.650 - 1.670 point area with liquidity of about 30,000 billion VND. The main trend of next week may be accumulation and foundation building.
However, investors need to be very cautious when the general context is still in the risk-off cycle. Large cash flow has not shown signs of returning to lead the long-term uptrend, so the uptrends at this time are more psychological pressure relief than a new wave.
In the current market context, cautious and defensive sentiment is overwhelming, causing cash flow to tend to shrink and move more selectively.
A notable highlight is the capital rotation to sectors benefiting from the rise in world oil prices, especially the energy and oil and gas segments. Speculative cash flow still maintains its presence here as an inflation shelter.
However, after a period of hot growth, the valuation level of this group has been pushed to a high level, leading to strong profit-taking pressure when investors prioritize realizing profits to manage portfolio risks.
In contrast to selling pressure in the oil and gas group, stocks in the public investment and hydropower sectors are showing incredible resilience. This group not only maintained its price level but also escaped the sell-off spiral thanks to its solid fundamentals and the growth story originating from the internal economy.
The main driving force comes from the Government's determination to disburse public investment capital and the stable domestic energy demand, helping these businesses to be less vulnerable to negative fluctuations from the international market.
