The Flow of Funds: Consecutive Failures at the 1300-Point Peak, Is There Still a Chance for a Breakthrough?

The VN-Index has made two attempts to break through the 1300-point mark in the past five sessions, but both were unsuccessful. The strong liquidity in these failed attempts has left a more distinct impression of distribution activities…

Experts continue to have opposing views on the short-term market outlook. The negative outlook from last week proved correct as the VN-Index experienced two fairly strong corrective sessions at the end of the week. This perspective continues to be concerned about the market being distributed and awaits the bottom of this corrective phase at a relatively deep level. In contrast, more positive opinions still hold that, although last week saw high liquidity and a clear downward pressure, the selling pressure seemed to wane on the last day. The expected adjustment threshold is around the 1250-1260 point level.

Despite differing short-term perspectives, experts generally remain positive about the market’s future trend. The current adjustment does not affect the existing upward trend, and the opportunity to break through the 1300-point mark remains.

Nguyen Hoang – VnEconomy

The market had a rather disappointing trading week, with three unsuccessful attempts to surpass the 1300-point peak. Each time it reached this threshold, selling pressure pushed it down, and it declined sharply in the last two sessions. Last week’s average liquidity also increased significantly, with high liquidity in the declining sessions. This week’s performance was quite different from the previous week. Does this indicate large-scale distribution in the market?

Nguyen Viet Quang – Director of Business Center 3, Yuanta Hanoi

Looking at the weekly VN-Index candle chart, we observe a reversal candle cluster with increased liquidity compared to the previous period. Additionally, the daily chart shows an SFP on Thursday, breaking the accumulation base of the previous five sessions with high liquidity. Furthermore, since September 29, there hasn’t been a single attractive candle; the green candles with high liquidity also have long wicks, and the red candles mostly have above-average volume. Based on these observations, I assess that the market is likely undergoing large-scale distribution.

Nghiem Sy Tien – Investment Strategy Executive, KBSV Securities

The market sentiment has turned more negative after the continuous upward momentum was halted around the 1300-point mark. Such a development is understandable as investors had high expectations, especially with the banking group taking the lead. The supply-demand correlation became evident in the final trading session, with a sharp drop in liquidity and the index closing at the session’s lowest point, signaling a contraction from the buying side.

However, I believe these signals indicate profit-taking rather than redistribution at the peak. While liquidity above VND 20,000 billion is positive in the current context, it is not significant enough to confirm distribution. The market will likely continue to fluctuate to shake off short-term trading positions and return to a balanced state to attract proactive buying demand.

Nguyen Thi My Lien – Head of Analysis, Phu Hung Securities Joint Stock Company

Last week, the market once again failed to conquer the psychological threshold of 1300 points and faced stronger selling pressure. However, with only one session of intense selling, I don’t think there are enough signals to conclude that the market is being distributed. On the contrary, as the leading banking group has maintained positive signals and is not under strong selling pressure, I lean more toward the possibility that the market is merely experiencing a short-term pullback at 1300 points before attempting to conquer it again.

Nguyen The Hoai – Director of Dong Nai Branch, Rong Viet Securities

The short-term trend is being challenged as the banking group is experiencing profit-taking. This group has large market capitalization and high liquidity, which contributes to the overall market liquidity. However, to say that the market is undergoing large-scale distribution, I think it’s not the right time yet.

Le Duc Khanh – Director of Analysis, VPS Securities

The strong resistance level of 1300 points remains a challenging milestone for the market. It is common for the index to adjust and accumulate or turn downward to the support area below. In my opinion, the VN-Index needs more time to return to the peak, and there is an opportunity for the market to recover in next week’s trading sessions.

Nguyen Hoang – VnEconomy

Last week, you assessed that the market was moving sideways and that the failure to break through the 1300-point mark was just a normal accumulation phase. With more negative changes this week, will the market enter a real corrective phase? How deep can this correction go?

Nguyen Thi My Lien – Head of Analysis, Phu Hung Securities Joint Stock Company

As mentioned earlier, I don’t think the current signals are overly negative. The market has only experienced one intense selling session, and there was no continuous selling pressure in the last session, as evidenced by the decrease in trading volume. Additionally, the leading banking group has maintained its upward trend. Therefore, I expect this to be just a short-term correction, and the market may recover next week. Support is expected at the 1266-1283 or 1250-1260 point range.

Nguyen The Hoai – Director of Dong Nai Branch, Rong Viet Securities

I assess that the market’s mid-term trend remains positive. Last week, tensions in the geopolitical situation hindered the conquest of the 1300-point threshold, leading to a retreat. However, with the domestic and foreign macroeconomic situation remaining stable, I think the index’s adjustment level could be around 1250 +/- 10 points.

Nguyen Viet Quang – Director of Business Center 3, Yuanta Hanoi

Last week, I assessed that the VN-Index had reached the end of Wave 5 and would enter a corrective phase, and the market was undergoing distribution. This week, that assessment proved accurate as the index experienced strong corrective sessions, breaking the previously constructed base. Currently, I am paying attention to several support areas: around 1240 points and 1200 points. However, these support levels do not guarantee a rebound, and we need to consider the price action at these levels.

Le Duc Khanh – Director of Analysis, VPS Securities

In my opinion, the market will adjust but remain within the 1265 – 1275 point range. Two support and resistance areas to watch are 1260 – 1265 +/- points (the lowest level early next week) and 1270 – 1275 points. If the VN-Index can surpass 1275 points, there is a high chance it will return to the previous peak of 1300 points and break through in the subsequent upward wave.

Nghiem Sy Tien – Investment Strategy Executive, KBSV Securities

The less favorable developments this week have not changed my personal perspective. The overall market sentiment has turned negative as the VN-Index failed to break through the 1300-point mark, leading to increased profit-taking and reduced positions to safer levels. However, I believe that the previous upward momentum was mainly driven by cash inflows from investors, and leverage was not significant. Therefore, the market is unlikely to experience a series of sharp declines. The potential support area where the index may show a recovery reaction is around the 1255 (+-10) point level.

Nguyen Hoang – VnEconomy

One of the reasons the VN-Index failed to break through the 1300-point mark last week was the weakening of large-cap stocks, including the leading banking group. Stocks like VHM, VIC, GAS, and FPT showed weakness, while bank stocks faced clear profit-taking after an impressive previous upward wave. In last week’s discussion, you highly appreciated the strength of the banking group and its role in pushing the VN-Index to break through the peak. Will this group maintain its role now that it is facing profit-taking and turning downward?

Nguyen The Hoai – Director of Dong Nai Branch, Rong Viet Securities

After a significant increase, it is reasonable for the banking group to undergo a corrective phase. In terms of valuation, this group remains attractive, so I think it will continue to be the market’s main driver in the coming period. Additionally, foreign investors have started net buying steadily recently, supporting the market. When large-cap stocks achieve consensus, the market will overcome this challenge.

Nghiem Sy Tien – Investment Strategy Executive, KBSV Securities

Some bank stocks have gone through a steep upward phase, so profit-taking is a normal development as investors want to secure profits. This is not necessarily a negative signal, and what’s important is the supply-demand correlation for those stocks. When there is sufficient inflow of money for multiple sessions, the stock’s upward momentum will improve, and buying demand will rejoin the stock after a deep enough correction. Additionally, the upward wave of large-cap stocks typically lasts a long time rather than just a few sessions. Therefore, I expect the banking group to maintain its leading role for the index.

Nguyen Viet Quang – Director of Business Center 3, Yuanta Hanoi

In last week’s discussion, I did not have a high assessment of the strength of the banking group because the robust and profitable stocks were mostly small and medium-sized ones. Many bank stocks have now returned to their all-time highs or reached strong resistance levels. I assess that this group will not maintain its role in leading and supporting the market as it did in the previous phase and may even exert additional downward pressure.

Nguyen Thi My Lien – Head of Analysis, Phu Hung Securities Joint Stock Company

After showing corrective signals last week, I still expect the banking group to maintain its crucial role in driving the VN-Index’s upward trend. Although the entire market faced intense selling pressure last week, the banking group demonstrated resilience, not experiencing strong selling pressure and maintaining its upward trend. Moreover, money flowed into medium and small-sized bank stocks. These signals suggest that it was small and individual investors taking profits after a good upward wave rather than large-flow investors exiting their positions. Therefore, I expect this group to maintain its trend and continue its role in pulling the index upward when the market recovers.

Le Duc Khanh – Director of Analysis, VPS Securities

In my opinion, bank stocks can still recover after a few corrective sessions, but then they will diverge, with some continuing to rise while others accumulate and correct without further increases. Other groups, such as securities, steel, and oil and gas, may take over in supporting the market.

Nguyen Hoang – VnEconomy

In the context of a rather negative development in the underlying market, the VN30 index futures maintained a wide positive basis difference. Is this an absurdity or a positive signal about expectations for the underlying market? If you were to participate in derivatives, would you bet on Long or Short at this point?

Nguyen Viet Quang – Director of Business Center 3, Yuanta Hanoi

Vietnam’s derivatives market is currently quite small, so various factors can influence it. I won’t try to explain the absurdity of the nearly seven-point positive basis difference in the VN30 index futures. Technically, the VN30F1M has completed Wave 5 and is in the “a” corrective phase, so I would bet on the Short side. However, I will wait for the second bounce session to get a reasonable entry point.

Nguyen Thi My Lien – Head of Analysis, Phu Hung Securities Joint Stock Company

Currently, the indexes are undergoing corrections, but the overall upward trend remains intact. In an upward trend, the futures index having a higher point value than the underlying index results in a positive basis difference, indicating the market’s expectation that the index may continue to rise in the future. Therefore, the current positive basis difference reflects the market’s positive outlook. If I were to participate in derivatives, I would prioritize Short positions for intraday trades due to the short-term corrective phase. In contrast, Long positions would be preferred when the market approaches the support level.