Today’s trading session saw a relentless downward pressure in the last 15 minutes, breaching the psychological support level. No special information is needed to create pressure; it can always be manufactured. The effect would be even better if there were resonance from large-cap stocks like VCB, VHM, VIC, and GAS.
This was the third such session, with a large margin of 1.5% (nearly 19 points) before bottom-fishing demand stepped in to support the market. In such sessions, the important thing is to understand the nature of the buying pressure.
There are two critical factors when assessing the bottom-fishing demand: First is the trading volume. Theoretically, when a well-known support level is breached, fear will spread, leading to large-scale panic selling, which will result in higher trading volumes. Second is the strategy employed by the bottom-fishing funds. If they simply place passive buy orders, waiting for sell orders to match, the price will continue to fall or close near the lowest price of the day. If there is a more proactive buying strategy, the price will gradually be pushed upwards.
This afternoon’s trading volume was quite high, and as expected, the initial buy orders were forced to match due to the rapid decline in stock prices, making it difficult to cancel orders. The selling pressure started at 2:15 PM, and most stocks hit their intraday lows during this period. The total trading volume on the HSX in the afternoon was approximately 13,800 billion, but the volume during the selling pressure and ATC periods only accounted for about 2,000 billion, which is not significant.
In terms of recovery, about one-third (33%) of the stocks rebounded by at least 1%, but very few turned positive. This is consistent with the low trading volume during the rebound.
Today’s widened trading band stimulated a significant amount of money to enter the market. However, the buying was not aggressive. It is likely that the market will continue to be range-bound next week and then gradually weaken further. The magnitude of the correction in many stocks has now exceeded the typical stop-loss levels. When the market turns bearish, all sorts of seemingly reasonable excuses tend to emerge, causing previously positive sentiments to evaporate. This is simply a change in sentiment. Market dynamics should be assessed through daily trading activities.
I maintain the view that a market correction is beneficial as it presents an opportunity to start actual allocation. At this point, many investors start to “switch sides” and become fearful. The beauty of the market is that if you don’t believe in the first two downward pressures, you will be forced to believe by the third one. Patience will help accumulate ample resources when the right time comes.
Next week, the market is likely to see a gradual increase in trading volume, which is a positive sign as it indicates that there will be buyers to absorb the selling pressure from those looking to cut losses. The index correction will create psychological pressure on the overall market, but individual stocks have their own price ranges. Therefore, it is crucial to monitor the trading activities of specific stocks within their respective price ranges, especially when the VN Index declines significantly.
Today’s derivatives market was quite interesting, with the F1 basis even turning positive. VN30 failed to reach 1292.xx and gradually sank to 1282.xx. This index had two wide trading bands today: one to 1282.xx and a deeper one to 1273.xx. Shorts could patiently wait for VN30 to reach 1282.xx, but the sharp decline below this level was a trap for F1 longs. The subsequent rebound from 1282.xx was also tricky, as it quickly took out long positions. However, the final downward pressure was favorable for shorts, as VN30 fell to 1273 despite the decisive break below 1282.
The bottom-fishing demand at the end of today’s session was still lackluster, suggesting that large players are not yet ready to make aggressive moves. The previous downward sessions witnessed higher trading volumes. However, buying can be likened to a campaign that must be conducted discreetly. Only when one intends to send a clear message to the market would there be a need for fanfare. So, take your time and selectively pick stocks. Derivatives offer flexibility for both long and short positions, as there will always be rebound opportunities.
VN30 closed today at 1278.32. The nearest resistance levels for the next session are 1282, 1291, 1300, 1308, 1315, and 1320. The support levels are 1277, 1268, 1260, 1255, 1246, and 1238.
“Blog chứng khoán” reflects the personal views of the author and does not represent the opinions of VnEconomy. The views, assessments, and investment recommendations are solely those of the author, and VnEconomy respects the author’s perspective and writing style. VnEconomy and the author are not responsible for any issues arising from the opinions and investment recommendations presented in this blog.
