Market likely to recover this week on bottom-fishing

April 18, 2022 - 07:06
Most securities firms believe that the stock market is likely to recover after retreating to near support zones. 
An investor watching the market's movements in front of a screen. Photo

HÀ NỘI — Most securities firms believe that the stock market is likely to recover after retreating to near support zones. 

The Vietnamese stock market recorded a turbulent week with the VN-Index on the Hồ Chí Minh Stock Exchange (HoSE) finishing the last trading session at 1,458.56 points, down 0.92 per cent. For the week, it lost 1.58 per cent, marking its second straight weekly loss. 

On the Hà Nội Stock Exchange (HNX), the HNX-Index closed last week at 416.71 points with a decline of 1.65 per cent. It posted the third straight weekly loss, down 3.54 per cent for the week. 

The market was closed on Monday.

Trading value on HOSE decreased by 35.4 per cent compared to the previous week to VNĐ83.5 trillion (US$3.65 billion), equal to a trading volume of nearly 2.54 billion shares, down 36.3 per cent. 

Similarly, the trading value on the northern bourse also posted a fall of 41 per cent to nearly VNĐ9.2 trillion, equivalent to a trading volume of 314 million shares.

According to Saigon - Hanoi Securities JSC (SHS), the trading volume of the whole market in the last 12 weeks was below the average of the last 20 weeks.

Analysts of Việt Dragon Securities Corporation (VDSC) said that the market failed to recover and continued in a cautious mode. However, the cash flow rose after some bargain hunting at the end of the last trading session, reflected in increased liquidity compared to the previous session and quite high liquidity near the end of the session.

Although the market ended near the session low, it also retreated to near the support zone of 1,450 points for the VN-Index and of 1,480 points for the VN30-Index, tracking the 30 biggest stocks in market capitalisation on HoSE. 

The cash flow is expected to engage in bottom-fishing activities in the next session and support the market. Therefore, investors can expect the market to be supported to recover but need to closely monitor market movements.

Investors also need to carefully consider buying activities as the market is still potentially volatile, prioritising stocks with good support and that can attract cash flow. In addition, they should be careful with stocks of a high-risk nature, VDSC recommends.

Meanwhile, SSI Securities Corporation (SSI) said that the extended loss of 0.92 per cent of the VN-Index in the last session, along with a strong increase in trading volume of 28 per cent, showed that selling pressure had increased significantly. 

However, the market benchmark is currently near the psychological support of 1,450 points and the strong support zone of 1,435 - 1,425 points. Therefore, the index is likely to recover after retreating to near support zones, according to SSI. 

On the other hand, SHS said that the trading week was quite negative as the VN-Index fell for the second week in a row. Although it only traded for four sessions, the average liquidity of each session went down, showing the hesitance of the cash flow at the moment.

With the current situation, it would be quite difficult for the market to quickly break out this week to move towards higher price areas. It might retreat to low price areas to search for bottom-fishing force. 

If bottom-fishing demand is good enough, reflected in improved liquidity, the VN-Index is likely to recover, according to SHS.

Investors who bought in on the April 13 session when the market tested the support zone of 1,425-1,450 points could continue to hold and increase stock proportion if the benchmark retests this area.

Last week, bank stocks posted the largest loss, down 3.8 per cent in market capitalisation, followed by gas and oil stocks with a drop of 3.5 per cent. VNS