Beta Securities (BSI) described the past week in the stock market as a "turbulent journey." The analysts noted that investors experienced a range of emotions, from anticipation to anxiety, and even panic.
After nearly 4 months of an uptrend and 6 weeks of strong gains with surging liquidity, the stock market experienced significant volatility at the end of July and the beginning of August as it approached the 2022 historical peak. The VN-Index dropped nearly 36 points compared to the previous week's close. The index hit a near-record of 1,565 points on 29/7 but also closed down 64 points on the same day. The weekly fluctuation range reached 78 points.
Liquidity remained high, almost always above 40,000 billion VND per session. Trading volume on the HoSE increased by 31.6% compared to the previous week. However, foreign investors net sold approximately 4,750 billion VND after a period of continuous buying in the first half of July.
According to Saigon-Hanoi Securities (SHS), market breadth leaned towards correction, with short-term selling pressure quite sudden after a period of strong price increases. Significant declines were seen in retail, technology-telecommunications, seafood, agriculture, steel, and real estate sectors. Meanwhile, the securities and port-shipping sectors continued to rise and only began to face strong selling pressure in the last session of the week.
SHS analysts predict that the VN-Index’s short-term trend will remain upward, supported around 1,480 points, with psychological resistance at 1,500 points. As the market concludes the second quarter earnings season, it may transition into a period of accumulation and correction following the strong price increases.
"The VN-Index will end its uptrend if it cannot hold the support level around 1,480 points," SHS emphasized.
August is a period with limited news flow. Market and company evaluations will be based on updated business results and growth prospects for the remainder of the year, as well as the impact of newly implemented tariffs on businesses. Therefore, SHS believes that the stock market will experience strong divergence and require time to find a new equilibrium after the surge driven by exceptional Q2 earnings growth, tariff postponements, and negotiations.
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Investors monitor stock prices at a securities company in TP HCM. Photo: An Khuong |
Investors monitor stock prices at a securities company in TP HCM. Photo: An Khuong
From a technical perspective, Vietcombank Securities (VCBS) observes on the daily chart that both the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) continue to decline, suggesting that the possibility of fluctuations or sideways movement will persist in the short term. However, the Chaikin Money Flow (CMF) indicator remains high, indicating that money is circulating in the market. The index's recovery from the 20-day moving average (MA20) at the end of 1/8 suggests an effort to find balance around 1,500 points.
On the hourly chart, the MACD is declining, but the RSI is forming a positive divergence. VCBS suggests a high probability that the VN-Index will continue to fluctuate in the coming sessions.
Therefore, VCBS analysts recommend that investors maintain margin levels at a safe range, continue holding stocks showing signs of recovery from support levels, and consider increasing their positions in these stocks during periods of volatility. Investors with substantial cash reserves can follow speculative flows and gradually invest in stocks attracting demand with significant upside potential relative to the nearest resistance level.
In the medium term, Beta Securities experts believe that the market remains in a positive trend. However, selling pressure is showing signs of a clear increase, particularly from both domestic individual investors and foreign investors. "This signals that profit-taking and investor caution are outweighing short-term expectations," BSI stated.
During this period of turbulence, experts advise investors to remain on the sidelines and observe rather than rushing to invest, avoiding "buying high" amidst the ongoing correction. Maintaining a high cash position and making only small purchases of fundamentally sound stocks that have corrected to strong support levels would be a risk-mitigating strategy.
Tat Dat
