Market shows lack of consensus near VN-Index resistance at 1,300 points
Analysts note that in the short term, Việt Nam's stock market is struggling to break through due to a lack of consensus around the psychological resistance level of 1,300 for the VN-Index.
Last week, the stock market in Việt Nam saw significant volatility, accompanied by continued pressure from foreign investor selling.
By the end of last week's final trading session, the VN-Index had declined by 0.23 per cent to 1,285.46 points, while the HNX-Index dropped by 0.93 per cent to 229.21 points. Market breadth was tilted towards sellers, with most stocks falling across both the HoSE and HNX.
Foreign investors remained net sellers, with total net sales amounting to more than VNĐ2.078 trillion on the HoSE, primarily targeting stocks like FPT (VNĐ365.77 billion), HDB (VNĐ220.25 billion) and MSB (VNĐ167.43 billion).
Phan Tấn Nhật, head of analysis at the Sài Gòn-Hà Nội Securities (SHS), noted that the State Capital Management Committee recently published financial results for 19 State-owned corporations, showing that parent company revenues reached VNĐ971.593 trillion by the end of September, fulfilling 83 per cent of the annual plan and up 115 per cent year-on-year.
The banking sector stood out during the week with growth in stocks such as BID, VCB, STB, VIB and MBB. Additionally, the real estate sector also saw some strong performers, including VHM, QCG and DXG. Furthermore, the seafood sector showed positive momentum with stocks like VHC, ANV, FMC and MPC.
After a strong recovery around 1,265 points, the VN-Index retreated to a narrow range amid selling pressure near the strong resistance at 1,300 points. However, buying momentum emerged around the 1,275-point support level for the VN-Index.
Nhật forecasts that in the short term, the VN-Index may maintain an upward trend above the 1,280-point support zone (the 20-day moving average).
However, the index is approaching the final stage of a narrow channel, below the strong 1,300-point resistance (stretching back from early 2024) and above the upward trendline connecting the lowest levels from August and September.
He predicts that in the coming two weeks, the VN-Index may break out of its current consolidation. In an optimistic scenario, the index could potentially retest the 1,300-point resistance.
Nhật warns that this is a significant resistance level, corresponding to peaks from June to August 2022 as well as the current year.
For the medium term, Nhật is more optimistic, suggesting that the VN-Index could continue its growth above the 1,250-point support level, aiming for 1,300 and possibly extending to 1,320 points. He emphasised that these strong resistance levels can only be breached with solid macro-economic support and exceptional corporate earnings growth. Additionally, geopolitical uncertainties, such as the Russia-Ukraine war and Middle Eastern tensions, would need to ease.
Analysts from the Vietcombank Securities (VCBS) highlighted international developments last week, including the European Central Bank’s (ECB) interest rate cut on October 17 – its third reduction this year – lowering the base rate to 3.25 per cent amid weakening economic growth and inflation in the Eurozone.
VCBS agreed that the market remains constrained due to a lack of consensus and the strength of the 1,300-point resistance. Volatility has partly shaken investor sentiment, while money flow has lacked broad-based support.
They advised investors to closely monitor market movements and use short-term price swings as opportunities for quick trades, particularly focusing on stocks in sectors such as banking and securities that continue to attract attention. — VNS
