“VN-Index loses steam before the 1,300-point resistance zone, the correction has not ended yet”

VFS Securities Expert: "VN-Index loses steam before the 1,300-point resistance zone, the correction has not ended yet"

Nhat Viet Securities Joint Stock Company (VFS) believes that the mid-term increase rule has been broken, the correction has not ended, investors should maintain the stock proportion to evaluate the market.

The VN-Index lost steam when approaching the resistance zone of 1,300 points. Therefore, when strong selling pressure appeared, the market fell into a deep correction since mid-July. This correction broke the medium-term uptrend channel formed since the end of 2023. The recent low-liquidity recovery sessions are considered just a technical recovery with the target being the 1.20 - 1,260 point zone.

The transaction value as of July 31, 2024 reached 349.1 trillion, down 11.7% compared to the previous month. Liquidity increased during strong corrections, while recovery sessions occurred with low liquidity. This development shows that the selling side has the complete advantage in leading the trend.

When strong selling pressure appears, the market falls into a deep correction.

Most industry groups fluctuated according to the general trend of VN-Index, showing a short-term reversal in mid-July. Previously, banking and retail stocks were still the "heroes" of the market when leading the recovery momentum. But when the market fell, this was also the industry group that pulled the market points, led by stocks that had increased strongly before such as MBB, LPB, MWG, DGW,... In addition, the rubber industry group with GVR was heavily affected by negative news, causing the industry group to fall sharply.

Unlike other industries that fluctuate in tandem with the market, the aviation and tourism groups such as HVN, ACV, etc. have faced selling pressure and have been net sold since the beginning of the month. This is also an industry group that has had a major impact, causing the market to show signs of cross margin calls.

On the other hand, there are still 2 low-capitalization industries that maintain green color such as media and healthcare. However, these are still 2 industries with low dilution rate and are quite picky about investors.

In the context that the correction has not been confirmed to have ended, investors should still keep their stock proportion at a low level of 20% - 30% and continue to monitor price movements in the 1,250 - 1,260 point range to assess the possibility of the market bottoming out.

With scenario 1, selling pressure continues to increase again, VN-Index may adjust to the support zone of 1,220 - 1,230, investors should reduce the proportion to 10% - 20% and only focus on holding stocks with business results that create new growth momentum in the second quarter of 2024.

With scenario 2, selling pressure gradually decreases, VN-Index moves sideways and accumulates in the 1,250 - 1,260 range, investors keep the position at 20% - 30% and continue to monitor signs of improving cash flow.

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Source: https://baodautu.vn/chuyen-gia-chung-khoan-vfs-vn-index-hut-hoi-truoc-vung-khang-cu-1300-diem-nhip-dieu-chinh-chua-ket-thuc-d221353.html