The buyers’ risk appetite has significantly increased, immediately changing the way orders are placed and the selected price range. Today’s market still witnessed many swinging movements, but they remained in the green zone and became more exuberant towards the end.
After a session of touching the bottom with a “pullback candle” and a session of tug-of-war equilibrium, the market began to accelerate upward. The most noticeable change was the shift from passively waiting for prices to actively blocking around reference prices, and today, buying pushed prices up. This dynamic is essentially a change in the perception of risk: when afraid of further price drops, one either refrains from buying or waits for very low prices, and it’s okay if there is no match. When the fear subsides, one starts to buy tentatively during price dips within the session. Eventually, when afraid of missing out on low prices, one buys by matching straight away, and finally, when worried that others might seize the opportunity, one engages in competitive pricing.
Today’s liquidity was maintained quite well, with a matching order value of about 16.9k billion VND on the two exchanges, showing an upward trend. The new information is that the Vietnamese market has not been considered for a ranking change, which, in theory, is not positive. However, the way the market responded shows that the information itself is not inherently good or bad. When the sentiment is exuberant, supply and demand become the deciding factors.
The VN30 blue-chip group today led the strong rally, and the representative index of this basket also performed the best. In recent sessions, capital has been focusing on this group, with a high weight of over 50% on the HSX floor. In fact, if we look at the index, the VNI failed to break the 1300 peak at the end of September and early October, but the VN30 has already broken through, and the recent dip was just a retest of the old resistance zone. The uptrend on the VN30 is much clearer, both in momentum and liquidity.
Today’s market also widely disseminated forecasts of Q3/2024 financial results. In fact, this information is old news, but the interesting thing is that when sentiment needs to find a foothold, whether the news is old or new doesn’t matter; what matters is whether it meets the needs of the moment. Everywhere, people start talking about how this stock will increase profits well, and that stock will surge, things that no one cared about yesterday or at the beginning of the week. Such psychological dynamics always repeat and remain effective.
There is now a growing acceptance of chasing higher prices, so the opportunity to buy at lower prices is diminishing. This is not necessarily a disadvantage because the portion bought during dips already has a low cost base. There will always be intraday fluctuations even when the market is exuberant. Consensus has not yet been fully achieved.
Today, the derivatives market continued to maintain a wide basis differential. In the last 2.5 sessions, this signal has indicated that expectations are in line with the underlying market. Although a wide positive basis is a disadvantage for Long, when the market strengthens, there is no other way, and Short is even riskier. In fact, even during intraday dips, F1 adjusted very little.
The threshold of 1341.xx for VN30 provided strong support for the index, serving as a good entry point for Long positions with a stop loss when VN30 falls below this level. VN30 broke through 1348.xx but failed to reach 1356.xx, however, the basis widened even further, which is advantageous.
Today’s strong rally is a signal of greater consensus from the sell-off signals and the changing buying sentiment. The market has established a short-term bottom for this correction phase, which is also just a typical corrective move. The strategy remains to look for buying opportunities, Long/Short flexibility with derivatives, and a preference for Long.
VN30 closed today at 1351.97. Tomorrow’s nearest resistance levels: 1357; 1367; 1376; 1380; 1388; 1397. Support levels: 1348; 1341; 1333; 1325.
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