Differentiated cash flow, VN-INDEX faces sensitive threshold
Last week, VN-DEINX decreased slightly by 0.2%, closing at 1,329.89 points, ending a streak of 4 consecutive increases. The market witnessed two active trading sessions at the beginning of the trading week but quickly cooled down in the following sessions when VN-INDEX approached the resistance zone of 1,350 points. Average liquidity in the whole market also decreased by 6%, showing that cash flow is stagnant.
Mr. Dinh Quang Hinh - Head of Macro and Market Strategy, VNDIRECT Securities Company - commented: "The strong profit-taking pressure at the resistance zone of 1,350 points has caused the market to turn down in the last three sessions of the week. In addition, cautious sentiment is increasing because the market does not have much supporting information after the first quarter business results announcement season and the general meeting of shareholders".
Forecasting for the trading week from June 9-13, Mr. Hinh said that the VN-INDEX index will re-evaluate the support zone around 1,320 points, corresponding to the moving average of MA20. This is an important area in establishing a short-term trend. If it loses this support level, VN-INDEX could retreat to a lower range of 1,300 points.
In that context, Mr. Hinh recommends that investors consider lowering leverage and bringing the stock ratio to a safe level if VN-INDEX cannot keep the 1,320 point zone. Realizing profits and managing portfolio risks should be prioritized, especially as the market is entering a sensitive 30-day period with many major events coming up, such as the monetary policy meeting of the US Federal Reserve (FED) in mid-June and the US-Vietnam tax negotiation deadline in early July.
Sharing the same view, Mirae Asset Securities experts also said that there was a "rest" of the market after a strong recovery period.
In the past week, the Oil and Gas, Construction, F&B groups continued to attract cash flow, and real estate, banking, utilities and retail stocks were under selling pressure. Foreign investors continue to net sell more than VND 2,100 billion, bringing the total net selling volume since the beginning of the year to more than VND 40,500 billion. Domestic self-employed and institutional investors also increased sales last week.
According to Mirae Asset, the market is entering the stage of establishing a new price level in June, with the expected support zone at 1,310 - 1,320 points. The increase can only be maintained if cash flow spreads more clearly to many industry groups, especially large-cap stocks with leading characteristics such as Banking, Retail and Technology.
Leading stocks need time to accumulate
Meanwhile, SSI Securities warned that profit-taking pressure may increase in June after the market recovered about 22% from the bottom in early April. SSI noted that the risk of an adjustment will be especially clear in the group of stocks that have increased sharply in the past time, when the price level has approached the technical resistance zone.
The differentiation trend is likely to continue, in which cash flow will likely target groups of stocks such as: Defense group, group with growth in second quarter business results and group less affected by factors related to tariffs. In the long term, the market still has a flexible monetary and fiscal support foundation. Driving forces from public investment and the recovery of the real estate market are expected to create a driving force for cyclical industries.
Technically, SSI points out the thresholds to note in the coming time, including the resistance zone of 1,360 - 1,390 points and the support zone of 1,300 - 1,320 points. In the recommended list, SSI proposed adding some stocks such as HPG, GMD, DPM and K Human; at the same time, maintain the recommendation of holding PVT, taking profits from PLC and making recommendations to SAS, ACV and PAT.
In the context of increasing adjustment risks, analysts believe that investors should restructure their portfolios in a safer direction, reducing leverage if VN-INDEX loses the support zone of 1,320 points.
