The Flow of Funds: Will the Market Break Through After Consecutive Failures at the 1300-Point Peak?

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’s high liquidity and clear downward pressure, the selling force on the last day showed signs of depletion. The expected adjustment threshold is mainly 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 surpass 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 fell 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, it has formed a reversing candle cluster with high liquidity compared to the previous period; the daily candle showed an SFP session on Thursday, breaking the accumulation base of the previous five sessions with large liquidity. Additionally, since September 29, the index has not had any attractive candles; the green candles with high liquidity also have long wicks, and the red candles mostly have above-average volume. From this, I assess that the market is likely undergoing large-scale distribution.

Nghiem Sy Tien – Investment Strategy Officer, KBSV Securities

The market’s psychology is turning more negative after the continuous upward momentum was halted around the 1300-point mark. Such a development is understandable as investors have high expectations, especially with the banking group taking the lead. The supply-demand disparity 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. Liquidity above the 20,000 billion VND level is positive at the moment, but it is not significant enough to confirm a distribution session. The market will likely continue to fluctuate to shake off short-term trading positions and return to a balanced state to attract proactive buying force again.

Nguyen Thi My Lien – Head of Analysis, Phu Hung Securities 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 think it is not enough to assess that the market is being distributed. On the contrary, as the leading banking group still maintains a positive signal without being under strong selling pressure, I tend to believe that the market is only experiencing a short-term shake-up at the 1300-point level 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 facing profit-taking. This group has a large market capitalization and high liquidity, which causes the overall market liquidity to increase as well. But to say that the market is undergoing large-scale distribution, I think it’s not 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 region 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 next week.

Nguyen Hoang – VnEconomy

Last week, you assessed that the market was moving sideways and had not surpassed the 1300-point threshold, only a normal accumulation pace. With more negative changes this week, will the market enter a real corrective phase? How deep can the adjustment level be?

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

As mentioned earlier, I think the current signals are not too negative. The market has only experienced one intense selling session, and there was no continuous selling pressure in the final session, evident in the low volume drop. At the same time, the leading banking group still maintains a positive trend. Therefore, I expect this to be only a short-term correction, and the market may recover next week. Support is in the range of 1266-1283 or 1250-1260 points.

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

I assess that the market’s mid-term trend remains positive. Last week, the tense geopolitical news caused difficulties in conquering the 1300-point threshold, leading to a retreat. But with the stable domestic and foreign macroeconomic situation, I think the index’s adjustment level could be 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 happened, and the index had corrective sessions that broke the building base. Currently, I am paying attention to some support regions: around 1240 points; around 1200 points. However, the support region does not mean that it will bounce back from there; it depends on the price reaction at that level.

Le Duc Khanh – Director of Analysis, VPS Securities

In my opinion, the market will adjust but remain within the range of 1265 – 1275 points. Two support and resistance regions to note reflect the market’s movement above the 1260 – 1265 +/- point support level (the deepest level early next week) will recover to the 1270 – 1275-point region. If the VN-Index surpasses 1275, there is a great opportunity to return to the old peak of 1300 points and break through in the next upward wave.

Nghiem Sy Tien – Investment Strategy Officer, KBSV Securities

The less favorable developments this week are not enough to change my personal perspective. The overall trading psychology has turned negative as the VN-Index’s attempt to conquer the 1300-point mark failed, leading to more profit-taking and position reduction to safe levels. However, I believe that the previous upward momentum was mainly driven by cash from investors, and the amount of leverage was not significant. Therefore, the market is unlikely to experience a series of sharp declines. The potential support region where the index may show a recovery reaction is around the 1255 (+-10) point level.

Nguyen Hoang – VnEconomy

One reason for the VN-Index’s failure to break through the 1300-point mark last week was the exhaustion of large-cap stocks, including the leading banking group. Stocks like VHM, VIC, GAS, and FPT did not perform well, while bank stocks faced clear profit-taking after an impressive previous gain. In our previous discussion, you highly appreciated the strength of the banking group and its role in pushing the VN-Index to break through. Can this group maintain its role while facing profit-taking and turning downward?

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

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

Nghiem Sy Tien – Investment Strategy Officer, KBSV Securities

Some bank stocks have gone through a sharp upward phase, so profit-taking is a normal development as investors want to secure their profits. This is not necessarily a negative signal, and what’s important is the supply-demand correlation of the stock itself. When there is sufficient large inflows sustained over multiple sessions, the stock’s upward momentum will improve, and buying force will rejoin the corrected stock at a deep enough level. Additionally, the upward wave of large-cap stocks usually lasts a long time, not 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 our previous discussion, I did not highly assess the strength of the banking group because the robust and profitable stocks were the small and medium-sized ones. Many bank stocks have returned to their all-time high or reached strong resistance regions. I assess that this group will not maintain its role in leading and supporting the market as in the previous phase and may even create additional downward pressure.

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

After the corrective signal last week, I still expect the banking group to maintain its crucial role in pushing the VN-Index towards a positive trend. Although the entire market faced intense selling last week, the banking group showed a difference as it did not experience strong selling pressure and maintained its upward trend. Moreover, cash flow shifted to small and medium-sized bank stocks. This signal indicates profit-taking by individual investors after a good gain rather than large-scale selling. Therefore, I expect this group to maintain its trend and continue its mission of leading the index when the market recovers.

Le Duc Khanh – Director of Analysis, VPS Securities

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

Nguyen Hoang – VnEconomy

In the context of a poor performance 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 moment?

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

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

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

Currently, the indices are correcting, but the positive main trend remains intact. In an upward trend, the futures index having a higher score than the underlying index causes 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 shows the market’s optimism about the potential continuation of the upward trend. If I were to participate in derivatives, I would prioritize Short intraday positions due to the short-term correction, and Long positions would be preferred when the market approaches the support level.