Investors should avoid buying stocks at the bottom too early when selling pressure is still high.

The stock market continued to decline in the last session of October and closed the VN-Index down 14.21 points. In yesterday's trading session of the stock market, once again the "nightmare time" after 2 p.m. continued to haunt investors, when low-price sell orders were issued, causing some large stocks to ease their decline and many other stocks on the electronic board hit the floor, causing the VN-Index to plummet quite strongly.

From a technical perspective, VN-Index continued to form a red candle with a strong decrease due to increased selling pressure towards the end of the afternoon session. Most indicators on both the daily and hourly charts are still pointing down negatively and show no signs of slowing down.

Ignoring the selling pressure from domestic investors that has caused the market to continue falling, foreign investors have returned to active trading by net buying VND366 billion with HPG stock being the most heavily collected. In total, in October, foreign investors net sold more than 148 million units, equivalent to a total net selling value of nearly VND2,306 billion, down 41.8% compared to September when they net sold more than VND3,962.4 billion.

Although the pressure to sell off at low prices was moderated in the last minutes, making the market less negative, in general, the selling pressure today is still very strong, especially in small and medium stocks and appearing widely in many industry groups. However, the worry will come in the next sessions when the possibility of margin call is very close.

VietCap Securities Company predicts that in the first trading session of November, VN-Index will continue to test the important support around 1,025 points. With some large-cap stocks having relatively stable transactions in recent sessions, it is hoped that this group will lead VN-Index to find a balance point at this support.

At that time, it is likely that the index representing the HOSE floor will form a recovery phase with the nearest resistance being the 1,050-1,055 point area (MA5) and higher at 1,070-1,075 points (MA10). The negative scenario will occur if the VN-Index is sold off strongly below the 1,020-1,025 point area.

Experts from SHS Securities Company said that VN-Index is still at risk of continuing to decline to the next support levels but can also recover technically in the coming sessions. Short-term investors should stay out of the market and observe market developments and take advantage of recovery periods to reduce the proportion of stocks in their portfolio if they are holding a high proportion of stocks.

For medium and long-term investors, the market is still confirmed to have passed the downtrend bottom at 950 points. Although the uptrend has ended, there is a high possibility that the market will enter the accumulation zone again. Therefore, long-term investors do not need to worry too much. If the structure is good from the beginning of the wave, they can continue to hold the portfolio and wait for the market to stabilize again.

Experts also recommend that investors remain cautious and refrain from buying at the bottom too early. The fact that the VN-Index has seen short bounces during the session is not enough to confirm that the market has found its equilibrium in the short term.

Source