An impressive reversal unfolded during the futures expiration session. It’s unclear if this was a pull-up effect, but the recovery was widespread, well-led, and supported by strong capital inflows.
According to regulations, the final settlement price is calculated from the last 15 minutes of the continuous matching period and the ATC batch, but the market recovered in the early afternoon. The rally was relentless, successful until the end, and supported by breadth. Even if there was a pull-up effect, such effectiveness is very positive, indicating that open trading has returned.
Order placement style and size always reflect risk appetite the best. The aggressive buying style witnessed this afternoon demonstrates a high level of initiative. The broad market participation also indicates a largely shared outlook, despite variations in individual stock recovery speeds.
The afternoon also saw a healthy increase in trading liquidity, suggesting an alignment of liquidity, range, and price direction. That’s the real meaning of “wick-pulling candles.”
Before today’s reversal, the market went through a narrow-range session with minimal liquidity (12.5 trillion VND in matched orders), and this morning’s liquidity was the lowest in eight sessions. The only issue this morning was that stocks had a slightly wider downward range; a narrower range would have resulted in a stronger signal. Nonetheless, the outcome was still positive. It appears that capital has been waiting for the October expiration to pass before taking action.
Technically, today’s reversal is positive, and the uptrend since August for VNI remains intact. If the market continues to rise on the last trading day of the week, there is a high probability that the index will form another higher low. Such a technical pattern will attract attention, and as long as the downtrend becomes shorter in duration, smaller in range, and closer to the resistance zone, the chances of breaking through the resistance increase.
However, it’s worth noting that indices have their own story, and a breakthrough would be ideal as it would create broad consensus and change the mindset of conservative investors. Opportunities still lie in specific stocks, and even in a favorable scenario, the chances are not equal. Therefore, it’s crucial to focus on your portfolio first. Stocks that have undergone a minor correction within their typical fluctuation range are strong. Those forming bottom zones are also worth considering. It will only take a few more bullish sessions for the lethargic, discouraged, and pessimistic sentiment of the past few days to evaporate!
Today was the futures expiration, and F2 maintained an excessively wide basis (averaging nearly 8 points). The F2 term is still very long, so shorts are unlikely to benefit from basis expansion. F1, on the other hand, doesn’t need to consider the basis, making it easier to set stop losses.
The initial slide this morning lacked a standard setup as VN30 mostly fluctuated below 1359.xx, quite far off, and at a slow pace. A better opportunity presented itself when VN30 broke below 1353.xx; the next support levels were 1348.xx and 1341.xx, and the stop loss for shorts could be set according to VN30 when it rebounded above 1348.xx. In the early afternoon, VN30 broke below 1348.xx, and the basis turned positive, after which the index rebounded above 1348.xx. That was the ideal point to close the position. The subsequent rebound again created a favorable setup for longs, with a stop loss set according to VN30 if it fell back below 1348.xx. The target for closing half the position was VN30 reaching 1353.xx, and the rest rode the wave beautifully to 1359.xx.
Today’s F2 performance indicates substantial expectations for the underlying market, even as VNI and VN30 plunged this morning. The inflow of capital had a positive effect, altering the pervasive pessimistic psychology of the past few days. The indices still have the opportunity to test the peak zones. The strategy is to be long/short flexible, favoring longs, and mindful of the basis.
VN30 closed today at 1362.89. Tomorrow’s immediate resistance levels are 1368, 1376, 1380, 1387, 1396, and 1401. Supports are at 1358, 1348, 1341, and 1333.
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