Continuing the strong trading streak before the Lunar New Year holiday, the VN-Index has continuously surged after the holiday thanks to the leadership of large-cap stocks. After 6 consecutive sessions of gains, the overall index has decisively broken through the strong resistance level of 1,200 points to reach the highest level in nearly 6 months. Looking further ahead, the VN-Index has also recorded its 4th consecutive month of gains, with an increase of over 200 points since the bottom in October.
In a livestream organized by VPBank Securities (VPBankS), Mr. Tran Hoang Son – VPBankS’s Market Strategy Director, said that the VN-Index has been continuously increasing, surpassing the Fibonacci resistance level of 1,202 and aiming for stronger technical resistance levels at 1,235 – 1,255 points, which were the peaks of September 2023 and the intersection of the trendline connecting the recent peaks.
The market breadth continues to support the upward trend. In terms of market breadth, there is a clear consensus among stock groups when the percentage of stocks above the MA50/MA20 rises to 69.44% and 73.26%, respectively, while the percentage of stocks above the MA200 also increases to 58.38%, indicating positive signals in terms of trend.
Although the uptrend on the daily chart is still strong and the VN-Index is in a new uptrend, signs of overheating are starting to appear. The heat is evident in the percentage of stocks with RSI>70, which is currently at 14.32% – a level that usually indicates the possibility of small previous peaks shaking or reversing. The higher this index, the greater the probability of a reversal.
However, VPBankS experts still believe that the stock market still has many opportunities in March. According to historical statistics, March usually has a high probability of gains, excluding the special impact of the sharp decline due to Covid-19 in 2020, the market in March usually maintains positive signals with an average increase of 2.46% in the last 5 years. And the market usually performs well in the first three months of the new year, as historical data has proven.
In addition, with the accelerated momentum of global stock markets, the expert expects the market to have room for further recovery, with support coming from large-cap stocks that are starting to accelerate from the bottom.
However, the trough period of the year is starting to appear from April, which is also the month of financial statements and empty information towards the end of the month, containing many fluctuations as the VN-Index approaches strong resistance levels. The resistance level according to the trendline connecting the recent peaks of 2022-2023 is currently at 1,235 points, which will be a short-term market challenge.
In the most optimistic scenario, the VN-Index can continue to accelerate towards the short-term target range of 1,255 – 1,280 points before a major correction appears. In a more cautious scenario, if the resistance level at 1,235 cannot be surpassed and a strong reversal appears, the index may enter a corrective phase, testing the support level of 1,160 – 1,170 points.
