Talkshow New Month’s Door Opening of March 2024 by SSI Research. Screenshot
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An issue that has been raised is information about the operator’s cash withdrawal through the bond channel. According to Mr. Nguyen Tuan Anh – founder of Finpeace, the market has absorbed most of this information.
He believes that the market has been increasing for a while, and investors will compare it with the increase in August 2023. However, this increase has a different element and almost extends to a new area, called “trending” – a highly volatile area. He pointed out that the market’s reaction to the recent two decline sessions was evident, but then there was a recovery.
According to Ms. Hoang Viet Phuong – Director of Analysis and Investment Consulting Center of SSI Research, if it happens for the first time, it will have a strong impact. However, in subsequent times, when the exchange rate fluctuates in the free market, and the gold price reaches its peak, there have been expectations of intervention from the Central Bank.
“The question the market is asking is how long will this activity last and when will the exchange rate stabilize. We may still hear this information for some time,” said Ms. Phuong.
In terms of technical perspective, Mr. Tuan Anh said that in the long run, there would be major zones. In the history of Vietnam’s stock market, there have been 2 very strong declines, the first in the period from 2001 to 2002 and the second is 2007 – 2008, with a decrease of about 80% from peak to bottom. And the two most recent times they went through are the peak of 2018 and 2022, with very similar decrease of about 42-44%.
If we compare these 2 waves, looking at the big picture, the market took about 500 sessions to resolve the entire adjustment phase. Thus, based on statistics, we are in the final stage of an adjustment phase. He assumes that for about a week now, the market has begun to venture into the “trending” market.
VN-Index has the potential to exceed 1,280 points in 2024?
Ms. Phuong also noted important information in March including the Fed meeting next week, the mid-term update report on the market upgrade potential of FTSE Russell. An expert from SSI Research said that there are still some obstacles that need to be resolved before the pre-funding condition is no longer a requirement for foreign investors. After that, securities companies will deploy and it will take time to complete the process and allow investors to trade in practice.
In addition, it is important that FTSE Russell needs to see a synchronous, convenient, and safe application for foreign investors to make a decision to upgrade; and these tasks also take time. SSI Research predicted that the upgrade will fall in 2025.
“In the recent period, the money has been concentrated in VN30 and foreign money into stocks with good liquidity and large market capitalization, all of which reflect expectations of an upgrade,” Ms. Phuong said.
In the same view, Mr. Tuan Anh also considered the issue of time and the stock market waves must have before the upgrade. Therefore, now there are many reasons to “change the season”. The history of stock exchanges around the world has increased before the upgrade.
The founder of Finpeace also noted that the short-term market has positive evaluations of information flows. Looking broader worldwide, except for China, all other markets have increased and on the other hand, the valuation of most assets has increased. This could be due to the effect of the money withdrawn earlier returning, pushing up valuations.
In Vietnam, Mr. Tuan Anh saw that the market is very close to the area where asset valuations are increasing to another level. An interesting point that he observed and pointed out is that about 3-5 months after information about household deposits reached a record high, the asset market reached a new level.
Regarding technical aspects, Mr. Tuan Anh said that the index is approaching the 1,280 point area. This is the threshold to determine whether the market has officially entered a growth period or not. At the same time, he warned that there is a high probability of a bull-trap occurring and in the past, there was a bull-trap in September 2023.
On the other hand, he noticed that in the same market state, some stocks have already gone ahead, not speculative ones, but investment stocks, belonging to a series of banking stocks. Therefore, the probability of being above the 1,280 point area is almost certain.
Trading strategy tends to attack
In the program, Mr. Nguyen Tuan Anh shared his trading strategy for investors. Firstly, he advised investors to understand whether they are attackers or defenders. Then, determine what form the market is in; and as analyzed, the market seems to be moving into a new area, so even defenders should consider a portfolio that leans towards attacking.
In the sideway area, we buy low and sell high, but in this new area, we have to learn a new lesson, which is to buy high and sell even higher. At the same time, he said that considering the major “trending” waves of the VN-Index have obtained the majority consensus of the industry groups, no matter how small the portfolio is divided, there are many opportunities.
However, a trading strategy that tends to attack also means that the risk tolerance level must be increased, with expected profits reaching higher levels. When the market moves into a new area, reduce the size of a position to withstand fluctuations.
