Market likely on a short-term uptrend: experts

Monday, Sep 06, 2021 06:25

Vietcombank's employees and customers during transaction hours. The bank shares were one of the top three most influential stocks last week. — Photo

The stock market gained for three straight sessions before the National Day holiday, which was different from the previous holidays when investors tended to take profits causing the market to fall or move sideways. Analysts said that investors’ sentiment is quite optimistic and the market is on a short-term uptrend.

The benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) finished last week at 1,334.65 points, while the HNX-Index on Ha Noi Stock Exchange (HNX) settled at 343.42 points.

The market closed on Thursday and Friday for the holiday.

For the week, both benchmarks moved higher with the VN-Index up 1.63 per cent and the HNX-Index up 1.36 per cent.

The average matching volume on HOSE reached nearly 680 million shares per session and on HNX was around 138 million shares per session, up 15.55 per cent and 1.14 per cent, respectively, compared to the previous week.

The rise in trading volume and the stable upward momentum of the VN-Index were positive points of the market last week.

However, foreign investors remained net sellers throughout August. Last week, they net sold a value of more than VND1.14 trillion (US$50.2 million) on both exchanges. Of which, they net sold a value of nearly VND1.2 trillion on HOSE and only bought a value of nearly VND57 billion on HNX.

Vietcombank Securities Company (VCBS) said that the market benchmark continued to recover after touching 1,280 points, showing the reliability of this support level in the near term and investors’ optimism in the current market.

Even though there was still short-term selling off pressure during sessions, the downtrend couldn’t hold for long and the index quickly rebounded, meaning cash flow is gradually returning to the market and is leading the uptrend.

The securities firm suggests investors focus on stocks that influence the market’s trend like bank stocks, oil and gas stocks, especially companies with positive outlooks in business results in the third quarter, as well as the rest of the year.

Long-term investors still need to limit the use of leverage during this period and carefully select stocks to disburse, as the VN-Index's rally has begun to slow down when it approaches 1,350 points.

Funan Securities Corporation said that the stock market recovered strongly from the lows of 1,298-1,300 points last week. The benchmark hit the lows at this support and went up quite firmly, along with the significant improvement of the market's liquidity in recent sessions. The average liquidity per session was over VND22 trillion.

On September 1, however, the rally slowed down under selling pressure before the National Day holiday on September 2.

On the technical front, the market is in a short-term uptrend and is heading towards the resistance zone of 1,350 - 1,360 points. However, it will be difficult for VN-Index to return to the old peak of 1,375 points.

With the complexity of the ongoing COVID-19 outbreak, the cash flows from new retail investors, who joined the market during the pandemic period, will remain in the market, investors can take advantage of this small wave for short-term trading with the portfolio proportion of 30 - 50 per cent.

“But investors should still be cautious with the market in the long term, especially before the release of the third quarter’s business results,” experts from Funan said.

Sharing the same positive view, analysts from BOS Securities Corporation said that technically, the VN-Index inched closer to the strong resistance level of around 1,335 points in last Wednesday's session. This causes technical indicators to signal the possibility that the market will maintain its uptrend in the short term.

Moreover, the recovering cash flow also supported the market's rallies. However, it is likely that the VN-Index may fluctuate in the early sessions of next week, before confirming the possibility of the short-term uptrend.

Investors maintain their current portfolio and can increase the proportion of stocks during corrections, BOS recommended.

Last week, Viet Nam Rubber Group (GVR), Hoa Phat Group (HPG) and Vietcombank (VCB) were three main stocks leading the market’s rallies, while losses in Vingroup (VIC) and Masan Group (MSN) limited the gains. — VNS

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