Shares forecast to face sharp volatility this week

Monday, Mar 29, 2021 08:06

CMC Corporation workers at its data centre in Ha Noi. Information technology stocks fell the most last week with losers including CMC Corporation (CMG), losing 7.2 per cent. — Photo CMC

Vietnamese shares are forecast to encounter sharp volatility in the short-term as the market shows signs of correction after three consecutive weeks of gains, analysts said.

On the Ho Chi Minh Stock Exchange (HoSE), the benchmark VN-Index edged down 0.08 per cent to close Friday at 1,162.21 points.

The index had lost 2.67 per cent last week.

An average of 699.2 million shares were traded on the southern exchange during each session last week, worth VND16.4 trillion (US$713.6 million).

In the last session last week, losses were narrowed as a surge from large-cap stocks boosted indices but the market was still shaky due to strong selling pressure.

According to MB Securities Joint Stock Company (MBS), the VN-Index dropping to below support level of 1,150 points helped attract outside cash flow. Investors sought out stocks that had been hit hard in the previous session.

“Basically, the VN-Index is still fluctuating in the accumulation zone, so the overall trading strategy is to buy and sell at resistance levels,” MBS said.

Tran Xuan Bach, a stock analyst at Bao Viet Securities Co (BVSC) added: “The market will have corrective movements early this week, before recovering at the end of the week. The 1,150-1,155 point area is still an important and decisive support area for the current market trend.

“If VN-Index fails to pass this zone, the market's trend will follow a negative direction in the short term. In this scenario, the index might drop to test the support level of 1,110 – 1,125 points.”

Analysts from Phu Hung Securities Joint Stock Company (PHS) said the short-term downtrend was still dominating. Technical indicators showed negative signs, which meant correcting pressure hadn’t finished.

The nearest support zones of the VN-Index maybe around 1,150 points and around 1,100 points, PHS said.

Saigon-Hanoi Securities Joint Stock Company (SHS) said the market had fallen after three consecutive weeks of gains. VN-Index could not surpass the psychological resistance of 1,200 points. The interrupted trading system made investor sentiment become more negative, leading to increased selling pressure.

“Liquidity increased slightly from the previous week, showing that selling pressure is quite strong, but technical signals also showed that bottom-fishing demand at low prices is still enough to keep the market to close above 1,155 points,” SHS said.

According to Bao Viet Securities Co, Investors should maintain stock exposure at 35-50 per cent.

“Investors with high stock exposure can consider lowering the proportion of stocks in the recovery phases of the market.

“Investors with a cash-rich position should consider disbursing with a low proportion and give priority to existing stocks in the portfolio if the index falls to the support zone of 1,150-1,155 points,” it said.

Information technology stocks fell the most last week with losers including FPT Corporation (FPT), down 4.6 per cent, CMC Corporation (CMG), losing 7.2 per cent.

It was followed by the construction materials group with Hoa Phat Group (HPG), down 2 per cent, Nam Kim Group (NKG), losing 5.8 per cent, and Hoa Sen Group (HSG), dropping 6 per cent.

On the Ha Noi Stock Exchange (HNX), the HNX-Index rose 1.41 per cent to close at 270.96 points.

It had lost 2.43 per cent to last week.

More than 171.6 million shares were traded on the northern bourse, worth VND2.6 trillion. — VNS

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