An investor stands in front of an e-board showing stock indices. Investors need to avoid chasing and keep the portfolio allocation at a reasonable level, while monitoring the supply and demand developments at the resistance area to reassess the state of the market. — VNA/VNS Photo
The market will continue to rise cautiously due to low supply and cash flow, but investors should remain vigilant for potential blockages and pullbacks at the resistance area while adjusting portfolio allocations to manage risk.
The VN-Index on the Hồ Chí Minh Stock Exchange (HoSE) rose 0.38 per cent on Friday, to close at 1,221.03 points.
The market continues to recover and enters the resistance area of 1,220-1,230 points, in front of the MA line (20). Liquidity increased compared to the previous session but is still low despite ETF restructuring activities, showing that supply is still temporarily low and in a waiting state, so the market is still rising with low cash flow, said Việt Dragon Securities Co.
"However, the market is still in a cautious state and there is a dispute with the star candle when entering the resistance area of 1,220-1,230 points. The possibility of being blocked in this area still exists and the risk of pullbacks still exists as the support cash flow is still low."
"Therefore, investors need to avoid chasing and keep the portfolio allocation at a reasonable level, while monitoring the supply and demand developments at the resistance area to reassess the state of the market. For now, investors should still consider rallies to take profits or structure your portfolio to minimise risk."
Experts suggest that the VN-Index has not yet formed a solid bottom due to the relatively short adjustment period and the absence of significant cash inflows.
Although the VN-Index has shown some recovery after a rapid decline, the decreasing liquidity indicates cautious cash flow in the market.
Nguyễn Thanh Nguyên Vũ, Founder of TVN & Partners, believes that the market still lacks sufficient indications of a bottom formation, as more time is needed for adjustment and substantial cash inflows have not entered yet.
"Market stabilisation is anticipated by mid-May, but a sideways trend may persist until June before a new uptrend emerges."
"However, this presents an opportunity for investors to gradually accumulate stocks within a reasonable valuation range while the VN-Index is still on an upward trajectory. It is expected to reach 1,380 points by the end of the third quarter of this year," Vũ said.
According to Huỳnh Hoàng Phương, Director of FIDT Analysis, the market requires accumulation to establish a new foundation while mitigating short-term risks, such as declining exchange rates.
Consequently, the VN-Index is expected to experience a sideways phase in May, with notable variations among different stocks.
In the medium and long term, positive factors like economic growth, profit growth of listed companies, interest rates, and potential upgrade stories continue to support the market. — VNS