The correction may continue.

The Vn-Index has lost its uptrend since early August 2024 at the 1,280 point area, which is a notable sign. The correction may continue to test the September bottom or retest the MA200 support level for the third time.

Stock Market Perspective Week 10/28 - 11/1: The correction may continue

The Vn-Index has lost its uptrend since early August 2024 at the 1,280 point area, which is a notable sign. The correction may continue to test the September bottom or retest the MA200 support level for the third time.

Global stocks fell across the board last week as investors sought safe haven assets such as gold or the US dollar to hedge against risks ahead of the US election, the Japanese election, and upcoming monetary policy meetings of three major central banks.

Analysts say the market will continue to be volatile ahead of the US presidential election on November 5. The level of uncertainty surrounding the election is high, as polls show that the chances of former President Donald Trump and Vice President Kamala Harris winning are not very different.

For the domestic market, there was the sharpest weekly decline in the past 4 weeks, closing the week at 1,252.72 points, down -32.74 points, equivalent to a loss of -2.55% compared to the previous week. The decline was mainly concentrated in the VN30 group when this index lost -2.7% of its value, while Midcap and Smallcap only decreased, -1.5% and -1.6% respectively.

Market breadth showed widespread selling pressure as the Vn-Index lost its upward trend since August, with real estate stocks going against the market trend.

Foreign investors net sold -1,183 billion VND, increasing the cumulative net selling since the beginning of the year to -70,380 billion VND. Last week, Fubon ETF net sold 3.77 million USD, some stocks with high proportions in this ETF include: HPG (10.5%), VHM (9.5%), VIC (8.5%), ...

The average liquidity of the whole market last week was VND 16,782 billion, down -4.9% compared to the previous week, recording the lowest level in the past 6 weeks. According to statistics, since the beginning of the year, the average liquidity has reached VND 22,581 billion, up 28.9% compared to 2023 and up 31% over the same period.

MBS Research believes that the Vn-Index losing its upward trend since the beginning of August at the 1,280-point area is a notable sign, as a result, cash flow becomes cautious in short recoveries even though the index has decreased by more than 50 points since the October peak.

Liquidity is reaching the stage of exhaustion like the bottom of last September at the 14-15 trillion range (lowest 12 trillion). Therefore, in the scenario where the VN-Index adjusts to the support zone of 1,240 points (+/-3 points), the lower the liquidity, the more positive the signal, investors can disburse to explore.

Notably, the 4% increase in the Dollar index in the past month, the highest level in nearly 4 months, has caused the USD/VND exchange rate to "surge" again and is in sync with the increase in domestic gold prices, which is a factor hindering the market in the short term.

Last week, the State Bank of Vietnam continued to withdraw more than VND41.6 trillion in system liquidity to raise interbank interest rates, thereby supporting exchange rate control in the context that the USD price has maintained an upward trend for three consecutive weeks.

The State Bank's net withdrawal move has caused interbank interest rates to surge last week.

MBS Research experts assessed that if this situation persists, it could have a negative impact on interest rate trends, especially at the end of the year when system liquidity often faces increased pressure.

Seasonal factors are dominating the market in October, compared to 2 years ago, the current market adjustment is relatively gentle. Currently, the market has no supporting information and cash flow is patiently waiting for the market's reaction at important support levels.

Accordingly, MBS Research believes that the correction may continue for the market to test the September bottom or retest the MA200 technical support level for the third time in the scenario of the world stock market preparing for 2 volatile weeks, which will be an opportunity for investors to choose potential stocks for the recovery period in November.

Since 2017, the Vn-Index has been increasing for 4 consecutive years and has increased in 6 of the last 7 years.

MBS Research recommends investment opportunities for stocks that are creating an accumulation foundation with low liquidity, or groups of stocks that have fallen past the 1,240 point threshold such as: Viettel, Seafood, Banking, Real Estate, Food, etc.

According to Agrisesco Research, “80% of stocks tend to follow the same trend as the main index”. In the condition that the short-term trend has become bearish and there is no confirmation of a reversal or early bottom, investors should consider reducing the proportion of stocks in early recoveries, especially stocks that weaken faster than the market (break the support/bottom before VN-Index).

Maintaining a high cash ratio will help investors be more flexible with their portfolios, preparing resources to disburse when the market confirms a bottom.

Source: https://baodautu.vn/goc-nhin-ttck-tuan-2810--111-nhip-dieu-chinh-co-the-con-tiep-dien-d228468.html