After two rapid decline sessions, VN-Index quickly “returns to the race”. The enthusiasm is back, and many stock groups that “fell in one place and doubled in another” helped the market decisively surpass the 1,250-point resistance.
Closing the session on March 13, VN-Index surged as if there had been no separation with a 25-point increase to the 1,270 level (March 13 session) – close to the previous peak. This is also the strongest breakthrough session of the market in the past 4 months, since the beginning of November 2023. The buying force remains positive as the matched trading liquidity on HOSE still reaches over VND 23,500 billion.
The index’s rapid rise in the opening session surprised many investors who missed the opportunity, and some also regretted selling stocks during the two declining sessions. Because many expectations are that the market needs time to consolidate and rebalance after the correction phase, especially after going through a hot streak for many months.
Discussing the quick turnaround of the market, Mr. Nguyen Tuan Anh, Chairman of the Board of Directors of FinPeace Group, believes that the nature of the market recently has been in an uptrend phase and the two downward sessions cannot dilute that short-term uptrend.
In particular, after the relentless climbing streak in the past 4 months, investors have become accustomed to the continuous upward movement of the index and cannot bear it when the index turns downward, so short-term profit-taking pressure is reasonable. When the market adjusts, it immediately attracts the cash flow of investors with a medium-term vision to participate. The fact that the market quickly finds its balance point shows that investors’ expectations for the medium-term upward trend are still being consolidated.
Mr. Nguyen Tuan Anh, Chairman of the Board of Directors of FinPeace Group
However, experts believe that the medium-term “wave” has not really been established and there is still a probability that this increase is a “bull trap”. However, investors with a medium-term vision and discipline will pay attention to the breakdown of the medium-term trend to increase their proportion with the goal of the end of 2024.
However, experts from FinPeace say that short-term profit-taking pressure always exists after each long wave, but the risk of a sharp and unexpected correction is unlikely. The leading driving force of the index in the future is (1) Valuation is attractive compared to the historical average and to stock indices in the region. (2) Many stock indices worldwide have historically surpassed, and VN-Index has also had nearly 500 sideways accumulation sessions since its peak. With a long enough accumulation time, price increase is necessary to “revalue” when earnings growth forecast is more optimistic. (3) Stocks are gradually becoming an asset allocation choice after the Covid period.
