"Bottom fishing" will be quite risky for swing traders.

Demand is still quite cautious, leaving open the possibility of a correction trend continuing in the early sessions of next week. Therefore, “bottom fishing” may be quite risky for swing traders when the short-term trend of the market is still down.

Stock Market Perspective Week 18-22/11: "Bottom fishing" will be quite risky for swing traders

Demand is still quite cautious, leaving open the possibility of a correction trend continuing in the early sessions of next week. Therefore, “bottom fishing” may be quite risky for swing traders when the short-term trend of the market is still down.

The market continued to experience a week of adjustment as the pressure on exchange rates and interbank interest rates showed no signs of cooling down. Specifically, the USD Index (DXY) continued to maintain its upward momentum last week due to reduced expectations that the US Federal Reserve (Fed) would lower interest rates at its December meeting.

The basis for this expectation comes from information about the US CPI index in October, which is in line with market forecasts, but higher than September 2024, and Fed Chairman Powell's recent comments that the Fed is in no hurry to lower interest rates.

The VND/USD exchange rate has rapidly increased again, approaching the peak in April 2024.

Therefore, the main trend of VN-Index last week remained down with 4/5 correction sessions. Liquidity showed signs of increasing gradually at the end of the week when the market retreated to deeper points and selling pressure was still dominant. On the positive side, VN-Index is returning to the lower channel of the uptrend since the beginning of the year around 1,200 (+/-10) points.

With the RSI indicator retreating to the oversold zone, Agriseco Research believes that the VN-Index will continue to maintain its downward momentum in the first session of the week. However, it is expected that the medium-term uptrend will be maintained and the market will have a technical recovery afterwards. In addition, investors should also consider the scenario of the index breaking through the above support zone to test demand in the context of factors that negatively affect investor sentiment.

Mr. Dinh Quang Hinh, Head of Macro and Market Strategy Department, VNDIRECT Securities Joint Stock Company, assessed that the increase in DXY and US government bond yields has put pressure on the VND/USD exchange rate and significantly narrowed the monetary policy space of the State Bank.

The central exchange rate has been continuously adjusted upward in the past week and the interbank exchange rate has nearly returned to its mid-year peak, combined with the interbank interest rate increasing again to over 5%, which has negatively impacted investor sentiment as well as the performance of banking, securities, and steel stocks, which are highly sensitive to fluctuations in exchange rates and interest rates.

Foreign net selling, concentrated in bluechips, also increased pressure on stock indices. Selling pressure has recently increased due to rising capital costs affecting investment performance.

Historical statistics show that the stock market is often under pressure to adjust due to unusual developments in interest rates and exchange rates. However, Agriseco Research believes that the exchange rate pressure is only short-term and not too serious because: (1) The monetary easing trend of the Fed and many countries continues; (2) Vietnam's foreign exchange reserves are still at a safe level; (3) Good trade surplus and (4) FDI disbursement and remittances are stable. Therefore, it is expected that the exchange rate pressure will soon cool down in the near future and help ease investors' psychology.

Accordingly, looking at the upcoming market, Mr. Hinh said that in the context of lacking strong enough supporting information and no signs of a sustainable cooling of interbank interest rates and exchange rates, investors should prioritize portfolio risk management at this time.

For investors holding a high proportion of their portfolio or using margin leverage, they should take advantage of technical recovery periods to reduce their proportion. For investors with low proportions or short-term trading, they should limit "bottom fishing" when the market has not confirmed a reversal point.

Based on a technical perspective, Agriseco Research believes that the VN-Index fell sharply by 2.71% last week and lost the important support level of 1,240 points (corresponding to the bottom established in September 2024). Liquidity in the correction session continued to increase, demand was still quite cautious, leaving open the possibility of the correction trend continuing in the early sessions of next week. Therefore, "bottom fishing" may be quite risky for swing traders when the short-term trend of the market is still down.

On the contrary, for investors who want to hold stocks for a long time, the market discount to a reasonable price range will be a suitable opportunity for investors to increase their proportion, especially when many groups of stocks attracting liquidity are returning to the lowest valuation in a period of 1 year, 3 years (for example, the banking group).

In the context of a market with many unpredictable risks, investors should avoid disbursing large amounts of money, but should divide it into exploratory parts to ensure account safety.

Source: https://baodautu.vn/goc-nhin-ttck-tuan-18-2211-viec-bat-day-se-kha-rui-ro-voi-nha-dau-tu-luot-song-d230262.html