Trading in tight range ahead of Tết holidays

January 16, 2023 - 09:18
Experts believe that in the period before the Lunar New Year, the index will fluctuate at a narrow level, but investors can still look for opportunities in short-term positions.
A digital screen showing trading information in the Hồ Chí Minh Stock Exchange. VNA/VNS Photo Hứa Chung

HÀ NỘI — The stock market traded in a narrow range last week, with most industries experiencing a divergence trend. Experts believe that in the period before the Lunar New Year, the index will fluctuate in a narrow level, but investors can still look for opportunities in short-term positions.

The market’s benchmark VN-Index on the Hồ Chí Minh Stock Exchange (HoSE) ended the week at 1.060.17 points, while the HNX-Index on the Hà Nội Stock Exchange (HNX) closed at 211.26 points. 

Both benchmarks gained for the week, with the VN-Index rising 0.8 per cent and the HNX-Index up 0.3 per cent. 

Liquidity also did not have a big change, partly reflecting the cautious sentiment of investors in the trading sessions before Tết. Specifically, the average matching volume on HoSE reached nearly 436 million shares per session, down 20.65 per cent over the previous trading week, while the HNX's average matching volume was nearly 51 million shares a session, down 16.52 per cent. 

This was also the reason why the VN-Index had no motivation to hit higher levels.

As the Lunar New Year approaches, investors are often worried. However, it is worth noting that in the last 21 years, the VN-Index has increased 15 times and decreased six times during sessions ahead of the festival. Especially, five days before Tết, the average performance is always positive.

Nguyễn Anh Khoa, Head of Analysis and Investment Consulting Department of Agriseco Securities Company, said that this will be an opportunity for investors to accumulate leading stocks, especially in the VN30 basket, at low prices.

Following a slight increase in the benchmark index and continued low liquidity levels in recent weeks, Vietcombank Securities Company (VCBS) believes that the market will continue to struggle and fluctuate in a narrow range before the holidays.

Experts from VCBS recommend short-term investors take advantage of the uptrend to take profits on short-term speculative stocks while limiting the opening of new transactions until the holiday.

BIDV Securities Company (BSC) forecasts that the VN-Index will continue its sideways trend this week, trading in the range of 1,050 to 1,065 points, and may fluctuate more strongly in the sessions close to Tết. 

Similarly, Yuanta Securities said that the market may extend the sideways trend and trade in a tight range.

If it breaks away from the sideways trend, the short-term cash flow is still quite weak. Furthermore, the short-term sentiment index is still in the negative territory, indicating that investors are still not ready to invest again and that the market is still diverging.

However, the short-term trend of the general market is still up. As a result, Yuanta advises short-term investors to continue to take advantage of correction sessions to increase the proportion of stocks in their portfolio, but not to exceed 50 per cent.

MB Securities (MBS) said that as the VN-Index gained for two consecutive weeks, the upper limit of 1,064 points is still a strong resistance when there is no support from liquidity. 

With a fairly positive breadth, the market is expected to break out of the accumulation zone after the Lunar New Year or remain sideways, but investors will have opportunities with individual stocks. VNS