Investors need to "wake up" and should take profits or cut losses decisively.

At the weekend trading session, the performance of the VN-Index left investors stunned when there was a massive sell-off, all pillar stocks fell sharply, especially the real estate group, making it impossible for the market to regain its growth.

In addition, market liquidity also set a record with trading volume exceeding 1.6 billion shares, setting a record for the number of shares traded in a session over the past 23 years. The matched value on the HoSE alone reached nearly VND35,000 billion, equivalent to nearly USD1.5 billion.

Under strong selling pressure, VN-Index closed down more than 55 points, equivalent to 4.5%, to 1,177 points. The entire market was painted red with more than 999 stocks falling in price, of which 277 stocks hit the floor. Thus, all the gains in August were "blown away" after just one trading session.

This is also the sharpest decline of the index in more than a year since May 2022. The 4.5% decrease also made Vietnam's stock market the sharpest decline in Asia on August 18. The capitalization of the HoSE floor also lost 222,000 billion VND, the value is only about 4.7 million billion VND.

Finance - Banking - Investors need to — VN-Index performance over the past 3 years (Source: FireAnt).

Explaining this contrasting development, Mr. Pham Tuyen - Investment Consulting Director of KIS Vietnam Securities JSC commented that, after a long period of growth, the Vietnamese stock market has shown signs of adjustment since the previous week and the beginning of this week. Especially in the session on August 17, the market also had very strong selling pressure at the end of the session, causing the market breadth to be quite large, invisibly creating the premise for the decline on August 18.

Notably, Mr. Tuyen said that according to the developments of the last two weeks, many groups of stocks did not have any breakthroughs but only moved sideways, even gradually decreased, with only a few stocks accelerating strongly with an element of expectation.

"Therefore, when the market is pulled by cash flow and external demand from new investors is not enough, it will have to decrease," Mr. Tuyen emphasized.

According to Mr. Tuyen, it is a “pull and dump” of the market to distribute stocks. When the market has increased for a long period, enough for investors to make a profit, even many stocks have increased 2-3 times, then when it plummets, it will cause panic and surprise for many investors.

The sharp decline on August 18, according to the expert, will make many investors "wake up" because in the previous sessions, the market had fallen and was pulled back right in the trading session. Therefore, the session last weekend could "break and break" the upward trend of the stock market during this period.

With his personal assessment and perspective, Mr. Tuyen predicts that the market will be much more difficult in the coming time, especially in the next trading week when there will be a widespread margin call phenomenon. At the same time, when the market falls deeply, the amount of stocks being pumped out will become larger and larger.

Therefore, it will take a long time for the market to stabilize and absorb all the stocks. In addition, with the cash flow also withdrawing from the market, recovery will take even longer, Mr. Tuyen affirmed.

With the current market, Mr. Tuyen recommends that investors should take profits while there is still profit and sell decisively. For new investors, it is necessary to take steps to reduce leverage ratio, even cut losses to preserve capital.

Macro information is often reflected in the price and growth process of the market. Therefore, to avoid shocks like the current one, investors need to be alert to recognize early before it is too late and be ready to sell before the market confirms the medium-term downtrend .

Source