VN-Index is forecast to move up to test the 1,030-1,080 point range this week but cautious sentiment still prevails.
On the Ho Chi Minh Stock Exchange, the VN-Index edged up 0.12 per cent to close Friday at 1,051.81 points. Overall, the southern bourse’s market index lost 2.6 per cent during the week.
An average of 1 billion shares were traded on the southern market during each session last week, worth 17.4 trillion (US$738 million).
“The market has not yet exited the state of exploration and dispute near the short-term support area, around 1,040 points. However, the fluctuation range and matching volume are being narrowed significantly,” said Viet Dragon Securities.
“This shows that cautious sentiment still prevails and Investors seem to be waiting for clearer signals from the market to make trading decisions. It is likely that VN-Index will still move within the range of 1,030-1,080 points and the recovery span to test the upper boundary may take place in the early sessions of next week.
“Therefore, investors should still observe supply and demand movements to re-evaluate the state of the market. It is possible to consider short-term buying in stocks with good fundamentals when returning to the support zone but need to consider taking profits or restructuring the portfolio in the direction of minimising risk when the market rises to the resistance zone.
“Although the market was supported when it retreated, it was still in a state of exploration of supply and demand. It is expected that this movement will continue in the near future before there is a clearer signal. The range of fluctuation at VN-Index is 1,035-1,080 points, corresponding to the range of 1,035-1,095 points of VN30-Index.
“Therefore, investors should still observe supply and demand movements to re-evaluate the state of the market. It is possible to consider short-term buying in stocks which have good fundamentals, but consider taking profits or restructuring the portfolio in the direction of minimising risk when the market rises to the resistance zone.”
The downward trend from September continued to extend to November, causing VN-Index to lose the psychological support level of 1,000 points. With the important support level being penetrated, selling pressure continued to increase, causing the index to continuously plunge and once fell to the lowest level of the year at 873 points. However, this deep discount has strongly triggered bottom-fishing cash flow.
A recent report by TPS Securities said that the reversal of the VN-Index at the end of November helped Viet Nam's stock market keep pace with the recovery trend of the global market.
Entering December, the TPS expects this recovery to continue after the previous period of strong decline because at this stage, the market is receiving positive news such as the Chinese government easing some pandemic control measures, and the exchange rate cooling down and some commercial banks reducing lending interest rates.
Based on the VN-Index's movements, TPS forecast three scenarios for the market in December.
In the positive scenario, if the VN-Index can return above 1,130 points, attracting exciting cash flow again. The target of the indicator in this period is zone 1,131-1,200 points.
In the neutral scenario, VN-Index will move sideways in price channel 1,030-1,130 points with liquidity maintained above the 20-session average.
In the negative scenario, VN-Index is likely to retest the buying power at the psychological level of 1,000 points.— VNS