The Flow of Funds: Has the Reflation Rally Reached its Peak?

The market took a breather last week, pulling back from its recent strong and consistent upward momentum. The VN-Index witnessed a relatively low average trading liquidity of VND 16.3 trillion per session, while selling pressure intensified as the market returned to its previous peak.

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After a strong and continuous uptrend, the market slowed down and turned down last weekend. The VN-Index only had a moderate average matching liquidity of VND 16.3 trillion/session, while the selling pressure showed signs of increasing as the market returned to the old peak area.

Experts are cautious after the market rose with a good profit margin in many stocks and the VN-Index hit important resistance levels. However, the market does not yet have enough signals to assess the risk of peaking in this recovery. There is still a possibility that the market will go sideways to accumulate absorption of short-term profit-taking and then continue to rise to truly test the old peak area.

Commenting on the weak liquidity in this recovery, experts said that caution is still high, so many investors are waiting for the two-bottom trend and may have missed the beat. However, there are still quite a few stocks that attract good cash flow, liquidity is maintained at a high level compared to the common level and impressive price progress. The money flow has become more focused. Therefore, investors are advised to pay attention to the possibility of large matching around the resistance area.

Experts also said that the market is entering a quiet news phase, so liquidity is unlikely to increase strongly. High differentiation is likely to appear with stocks that have their own stories in the coming time. Groups of export, steel, securities, electricity, oil and gas, and information technology stocks are currently prominent.

Nguyen HoangVnEconomy

The VN-Index had a good increase last week, but most of the increase was concentrated on Monday, while the last three sessions stagnated or even adjusted down. Is this a signal that the market is resting and accumulating absorption of short-term goods before testing the March peak, or has it peaked and reached the technical recovery peak?


The period of low recovery liquidity also often occurs, but when it reaches the resistance area, it “explodes” in liquidity and large selling pressure appears, then those will be bad signals for this recovery.

Nguyen Viet Quang

Nguyen Thi My LienHead of Analysis, Phu Hung Securities Company

The market had a good increase at the beginning of the week and then tended to fluctuate within a small range of 1,234-1,257 points in the remaining sessions. In my opinion, the current signals are not negative when the selling pressure is not strong, however, the VN-Index is entering the supply area of 1,250-1,280 points, I think we should be cautious about this area. If there is a reduction in the fluctuating range of 1,234-1,257 points, it is likely to be adjusted again.

Nguyen Viet QuangDirector of Business Center 3 Yuanta Hanoi

Currently, the VN-Index is facing a very strong resistance confluence by the 76.8 fibo area, the current downtrend channel, as well as the resistance area of this downtrend, so it is understandable that the index slowed down the increase of the recovery momentum and had decreasing sessions at the end of the week.

Currently, I am considering two scenarios for the VN-Index:

Scenario 1: VN-Index increases to the area around 1,252 points and then adjusts to the area around 1,150 points, creating two bottoms.

Scenario 2: VN-Index sideway around the range of 1,225-1,280 points for 2-3 weeks to absorb the supply force in the previous distribution phase, then break the peak.

In my opinion, the next two weeks are important to determine which scenario the market will follow.

Nguyen Sy TienInvestment Strategy Officer, KBSV Securities

Since the bottom area of 1,170 points, the VN-Index has rebounded about 7% and many stocks have approached the previous strong decrease area. This will create an increasing short-term profit-taking effect, and the decrease range will be deeper, although there is still buying force for a reaction at the end of the session to push the price back up. However, there are still stocks that move separately and show that the increase can still be maintained. Therefore, the index is likely to fluctuate around the range of 1,260 (+-10), the resistance area that is decisive for breaking the peak of 1,29x.

Le Duc KhanhDirector of Analysis, VPS Securities

The strong recovery wave of VN-Index bounced from the area of 1,170 points and touched the strong resistance of 1,250 points. I think the accumulation and temporary rest dynamics may take place in some sessions before breaking above the March peak area, which is likely to happen only in the next week or the second week of May.

Money flow trend: Recovering with low liquidity, has the market bottomed out?


Nguyen HoangVnEconomy

This increase has an unimpressive average liquidity – although there is also a quite vibrant matching session – and the lower it goes, the lower the liquidity. It seems that investors are not very excited and accept missing the beat instead of jumping in. Is this an unfavorable signal for this recovery?

Nguyen Viet QuangDirector of Business Center 3 Yuanta Hanoi

In the recent period, the market has created a bottom and gone up, so most investors will stay out of the market because there are no signals indicating new stock purchases. Many investors waiting for the two-bottom signal is normal, so the recovery momentum has low liquidity. The period of low recovery liquidity also often occurs, but when it reaches the resistance area, it “explodes” in liquidity and large selling pressure appears, then those will be bad signals for this recovery.

Nguyen Thi My LienHead of Analysis, Phu Hung Securities Company

Although the current recovery momentum is only accompanied by average liquidity, the liquidity is generally tending to improve from the bottom up. At the same time, the first session of the week also gave a signal of a vibrant session following the momentum. Therefore, the signal of this recovery is not too weak. I just want to note the possibility of short-term adjustment when the index is entering the upper supply area.

Le Duc KhanhDirector of Analysis, VPS Securities

Investors are still used to wanting to forecast the short-term market trend before making stock trading decisions. In my opinion, a more appropriate way is to still follow the general market, not worry too much, and pay attention to individual stocks at the same time because there are still stocks that go against or increase better than the market, especially in the last trading week.


I think the market is gradually finding a new balance and waiting for new information. Money flow is still differentiated in this period, not completely withdrawn from the market.

Nguyen Thi My Lien

Nguyen Sy TienInvestment Strategy Officer, KBSV Securities

The index often has peak liquidity dynamics at times when the market starts to adjust deeply and maintains a low level around the bottom-forming phase, and even when it starts to enter the recovery phase. Therefore, the cautious money flow in this recovery is not too problematic.

In addition, the VN-Index has also recovered about 7%, and some stocks have recovered by 10-15%, so investors will tend to limit new purchases and prioritize short-term profit-taking or restructuring their portfolios around this point. This is not an unfavorable signal for the index, but simply a common phenomenon in short-term recoveries. Factors that can significantly affect the dynamics of the index such as exchange rates, the DXY index, and the recovery prospects of listed companies should be monitored.

Nguyen HoangVnEconomy

The market is starting to enter a quiet news support period, the exchange rate story has no new changes when it is still high in the peak area, savings interest rates are rising… In the previous exchange, you expected the market to differentiate by stock in this period. In your opinion, what will be the stocks/stock groups that have their own stories to be able to perform prominently compared to the general level?

Nguyen Thi My LienHead of Analysis, Phu Hung Securities Company

As I mentioned in the previous issue, I think the market is gradually finding a new balance and waiting for new information. Money flow is still differentiated in this period, not completely withdrawn from the market. Recently, the news that the US will hold a hearing to consider recognizing Vietnam as a market economy has helped the export group such as seafood, textiles, and steel to attract money flow.

In addition to the export group, I think some stock groups such as the construction group with the story of promoting public investment and expectations of a recovery in the real estate market; or the securities group with the story of market upgrade and the electricity group with the story related to electricity price increases and transitions between weather conditions will be the stories that can be expected in the remaining period of the second quarter.

Nguyen Sy TienInvestment Strategy Officer, KBSV Securities

I expect two groups of stocks with (1) profit levels that have recovered strongly from the bottom such as Retail, Tourism, Construction, and Hydropower when stocks in this group have a strong rebound in business activities and at the same time focus on optimizing all kinds of costs; (2) groups with growth expectations still being maintained such as Industrial Park Real Estate and Export groups.


VN-Index has also recovered about 7%, and some stocks have recovered by 10-15%, so investors will tend to limit new purchases and prioritize short-term profit-taking or restructuring their portfolios around this point.

Nguyen Sy Tien

Le Duc KhanhDirector of Analysis, VPS Securities

I am interested in 5 prioritized stock groups this year, of course, including stocks with special advantages and prospects this year, which are still the groups of stocks in the chemical, steel, financial – securities, oil and gas, and telecommunications industries.

Nguyen Viet QuangDirector of Business Center 3 Yuanta Hanoi

Currently, I am paying attention to two industry groups, which are securities and steel.

The securities group has strong business results growth along with the market sideway in the area above 1,200 and breaks the peak, so the following quarters of this year will also be very positive, helping the business results of this group to continue to grow well.

The steel stock group benefits from the recovery of the real estate market as well as the government’s promotion of public investment. In addition, steel stocks all have good business results growth in the first quarter as well as are entering a new growth cycle.

Nguyen HoangVnEconomy

In the recent short-term increase, many stocks have increased quite well, have you participated or not, and what is the ratio? Are you currently taking profits or still holding and waiting for the market to test the peak?

Nguyen Viet QuangDirector of Business Center 3 Yuanta Hanoi

In the recent momentum, I bought back a part of the stocks that I had sold at high prices, and last week I also sold a part to reduce the ratio. Currently, I am holding 70% stocks and 30% cash, and I am waiting for the next market dynamics to make new plans.

Nguyen Thi My LienHead of Analysis, Phu Hung Securities Company

I still maintain a cautious view and have not participated much in the recent momentum when the signals I observe still show that there may be another adjustment phase. In the short term, I still think that the market’s increases are opportunities to restructure the portfolio.


In my opinion, a more appropriate way is to still follow the general market, not worry too much, and pay attention to individual stocks at the same time because there are still stocks that go against or increase better than the market, especially in the last trading week.

Le Duc Khanh

Le Duc KhanhDirector of Analysis, VPS Securities

The stock ratio is still at a high level – the short-term trading opportunity last week also brought impressive profit results – many stocks increased too well, so profit-taking was made in the last two sessions to adjust the ratio before reinvesting in the next trading week. The possibility of the market breaking the peak is still higher, and I am very much looking forward to this dynamics.

Nguyen Sy TienInvestment Strategy Officer, KBSV Securities

I have increased the stock ratio again to about 50% when the index dropped to around 1,170 – 1,190 points, and reduced it to 30% when VNIndex went up to 1,25x to preserve short-term profits. For the fluctuating range and the weakening signal is increasing, lowering the ratio to a safe threshold should be a priority.