VN-Index heading toward strong resistance level of 1,400 points this week: experts

Update: June, 28/2021 - 07:27
PetroVietnam Gas's Thị Vải LNG receiving terminal in Vũng Tàu Province. Photo

HÀ NỘI — After struggling to find direction, the market hit a new record on the back of bank stocks in the last trading session. Analysts from securities firms said that this will be the driving force for the VN-Index to head toward 1,400 points. 

On the Hồ Chí Minh Stock Exchange (HoSE), the market benchmark VN-Index witnessed a choppy week of trading with up and down sessions. However, the index finished the week at a new peak of 1,390.12 points. 

The HNX-Index on the Hà Nội Stock Exchange (HNX) also closed higher in the last session at 318.22 points. 

For the week, both benchmarks increased with the VN-Index up 1.27 per cent, while the HNX-Index gained 0.63 per cent. 

According to MB Securities Joint Stock Company (MBS), the positive signal in the last trading session of last week triggered a large cash inflow into the market, helping the gaining momentum to get stronger and the VN-Index close at a session high.

MBS believes that the market has entered a new rally wave with the return of the leading stocks including banks and securities stocks.

Technically, the new peak of the VN-Index with strong cash flow is a sign confirming the market's continuing uptrend. With the current rallies, the resistance level of 1,400 points can be conquered, MBS said.

Viet Dragon Securities Corporation (VDSC) also expects that the market benchmark will continue to increase in the near future, but the rally will be slow and cautious due to potential profit-taking pressure in the range of 1,400 - 1,420 points. 

Similarly, analysts from SSI Securities Joint Stock Company (SSI) said that with the current situation, the VN-Index has the motivation to keep moving towards the target price level of ​​1,400 points. However, to break over this level convincingly, it needs to be strengthened from the increase in trading volume, SSI added. 

Meanwhile, Saigon-Hanoi Securities JSC (SHS) said that even though the market rallied for the second consecutive week, but the gain slowed down compared to the week before. At the same time, the liquidity also recorded a second straight weekly decline, but still above the recent 20-week moving average, showing that the cash flow has not withdrawn from the market but only got caught in certain caution.

On the technical front, the strong resistance level of the VN-Index in this rising wave will be around 1,400 points. However, because the market liquidity declined, it showed that the buying demand was not really strong and the market could reverse at any time when the selling pressure increased.

Accordingly, the market is likely to move up to 1,400 points this week and fluctuate strongly around this threshold.

Last week, the market liquidity on both exchanges continued to decline compared to the week before with an average of about VNĐ23.7 trillion (US$1.03 billion) per session on the two exchanges.

The trading value on HoSE dropped by 13.1 per cent to nearly VNĐ103.8 trillion, equivalent to a decrease of 11.4 per cent in trading volume to over 3.4 billion shares, while the trading value on the HNX plunged 31.2 per cent to VNĐ14.85 trillion, equivalent to a trading volume of 645 million shares, down 25.8 per cent. 

The market rallied slightly amid strong division in pillar stocks. Utilities stocks gained the most, up 3.6 per cent in market capitalisation, mainly boosted by rises of PetroVietnam Gas JSC (PVGAS, GAS) up 5.7 per cent, Pha Lai Thermal Power Joint Stock Company (PPC) up 4.4 per cent, and PetroVietNam Low Pressure Gas Distribution JSC (PGD) up 0.3 per cent. 

It was followed by bank stocks with an increase of 1.9 per cent in market capitalisation. Bank stocks with outstanding performance were Vietinbank (CTG), up 5.1 per cent, Asia Commercial Bank (ACB), up 3.9 per cent, and Vietcombank (VCB) and MBBank (MBB) both gaining 3.8 per cent. 

Other sectors reporting big gains included gas and oil stocks and information technology stocks.

On the contrary, material stocks posted the biggest losses last week, down 1.4 per cent in market capitalisation. The losses were contributed by Hoa Sen Group (HSG), down 6.5 per cent, Hoà Phát Group (HPG), down 2.7 per cent and Nam Kim Steel JSC (NKG), down 2.6 per cent. 

Meanwhile, foreign investors still fled from the market despite the new record high as they net sold more than 45 million shares, worth up to VNĐ1.13 trillion. VNS