An impressive turnaround unfolded during the futures expiry session. It’s unclear if this was a pull-up effect, but the recovery was widespread, with leadership and good participation.
According to regulations, the final settlement price is calculated from the last 15 minutes of the continuous matching period and the ATC session, but the market recovered this afternoon just a few minutes after the start of the session. The rally was persistent, 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.
The order placement style and size always reflect the risk appetite the most. The aggressive buying style witnessed this afternoon demonstrates a high level of proactiveness. The broad participation also indicates a largely similar outlook, even if individual stocks recovered at different paces. The improved afternoon liquidity also suggests 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 volume (12.5k billion matches) and the smallest morning volume 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 money has been waiting for the October expiry to pass before taking action.
Technically, today’s reversal session is a positive sign, maintaining the uptrend in the VNI since August. 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 downtrends become shorter in duration, smaller in range, and closer to the resistance, the chances of breaking through the resistance increase.
However, it’s important to note that the index has its own story, and a breakout 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, focus on your portfolio first. Stocks that have undergone a minor correction within their typical fluctuation range are strong. Those creating a bottom are also worth considering. It only takes a few more sessions for the lethargic, discouraged, and pessimistic psychology of the past few days to evaporate!
Today is the futures expiry, and F2 maintains 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, with the VN30 mostly fluctuating below 1359.xx, quite distant, and at a slow pace. A better opportunity presented itself when the 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 the VN30 when it rebounded above 1348.xx. At the beginning of the afternoon session, the VN30 broke below 1348.xx, and the basis turned positive, after which the index rebounded above 1348.xx. That was the point to close the position. The subsequent rebound again created a good setup for longs, with a stop loss according to the VN30 if it fell back below 1348.xx. The target for closing half the position was VN30 at 1353.xx. The rest rose nicely to 1359.xx.
Today’s F2 performance indicates a significant expectation for the underlying market, even as the VNI and VN30 plunged this morning. The inflows that pushed prices up had a positive effect, altering the psychology of discouragement witnessed in recent days. The opportunity for the indexes to retest the peak regions remains. The strategy is to be long/short flexible, favoring longs, and mindful of the basis.
VN30 closed today at 1362.89. Tomorrow’s nearest resistance is 1368; 1376; 1380; 1387; 1396; 1401. Supports are 1358; 1348; 1341; 1333.
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