Market is expected to continue a downward correction this week as investors are still cautious about bull traps with large volatile upcoming trading sessions.
The benchmark VN-Index on the HCM Stock Exchange (HOSE) increased 0.03 per cent to close at 1,026.80 points on Friday. But its previous dive of 0.25 per cent on Thursday still left the VN-Index down 2.23 per cent week-on-week.
The HNX Index on the Ha Noi Stock Exchange (HNX) went down 0.05 per cent to end Friday at 122.57 points, after having gained 1.27 per cent in the previous session. The HNX Index finished lower from the previous week by falling a total of 0.06 per cent after three trading days.
An average of 240 million shares were traded in each session of the last trading week, worth VND6.4 trillion (US$280.7 million). The figures were down 6.7 per cent in volume and 13.5 per cent in value compared to the previous week.
Hoang Thach Lan, head of individual client analysis at Viet Dragon Securities Company told tinnhanhchungkhoan.vn that many large-caps recovered slightly in the last two sessions of the week, but they are forecast to trade lower than the current price range.
Therefore, VN-Index may also reach a lower level, around 1,000 points, Lan said.
“Unless there is some optimistic information to help push up the market, the Vn-Index can hardly stay positive. In the current time, perhaps the only good news is the possibility that MSCI (Morgan Stanley Capital International Inc) may include Viet Nam in the MSCI review list for a potential reclassification to Emerging Markets status,” he said.
Lan said from mid-April, his company analysis team have noticed that no less than five times the market had experienced a bull-trap, a false signal indicating that a declining trend in a stock or index has reversed and is heading upwards when, but in fact, the security will continue to decline.
Investors thus failed to gain profit from their bottom-fishing spending, he said.
“However, I think investors will still increase bargain purchases if the market falls further,” Lan added.
According to Nguyen Huu Binh, the head of the market analysis division of Viet Nam Investment Securities Company, the market is unpredictable because of poor investor condidence, especially when they are still making their trading decisions based on the moves of foreign investors.
Foreign investors continued to be net sellers on the two exchanges last week, offloading shares worth a combined VND1.8 trillion (US$79.2 million), more than doubling net sell value of the previous week.
Therefore, the next resistances for the index are forecast at 1,060-1,120 points, and the next support level for the index is forecast at 830-970 points.
According to Bao Viet Securities, the market may see some more “bull trap” sessions before falling to a lower support zone of around 970 in the short term. The new high ranges for the index are forecast at 1,060-1,070 and 1,125-1,135. The next support level for the index is forecast at 994-1,010.
According to BIDV Securities JSC (BSC), compared to negative sentiment in previous sessions, investors’ sentiment has been more stable but still skeptical. The market opened in green but did not hold long, both indexes fluctuated up and down
Meanwhile, Viet Dragon Securities Company (VDSC) said in its daily report that indexes increased slightly on extreme low volumes on Friday. Friday’s recovery was narrowed remarkably due to strong selling forces from foreign investors.
“Indexes are now quite near their strong supports and traders may consider disbursing partly at low prices,” it said. — VNS
