An impressive reversal unfolded during the futures expiration 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. However, the market recovered in the early afternoon, right after the opening minutes. 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 best. The aggressive buying style seen today indicates a high level of proactiveness. The broad participation also shows a similar mindset, even if stocks recovered at different paces. The improved afternoon liquidity also suggests alignment in liquidity, range, and price direction. That’s the true meaning of “wick-pulling candles.”
Before today’s reversal, the market went through a narrow-range session with minimal liquidity (12.5k billion matches), and this morning’s liquidity was the lowest in eight sessions. The only issue this morning was that stocks had a slightly wider range of declines; if it had been narrower, the signal would have been stronger. Nonetheless, the outcome was still positive. It seems that money has been waiting for the October expiration to pass before taking action.
Technically, today’s reversal is a positive sign, 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 time, 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 the best-case scenario, the chances are not the same. Therefore, focus on your portfolio first. Stocks that have undergone a minor adjustment within their typical fluctuation range are strong. Those creating a bottom area 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 expiration, and F2 maintains an excessively wide spread (averaging nearly 8 points). The F2 term is still very long, so Short may not benefit from basis elasticity. F1 doesn’t need to consider the basis, so it’s easier to set a stop loss.
The initial slide didn’t offer a standard setup as VN30 mainly fluctuated below 1359.xx, quite far, and slowly. A better opportunity arose when VN30 broke below 1353.xx; if this level is breached, the next support is 1348.xx and 1341.xx. For Shorts, the stop loss can be set according to VN30 when it rebounds above 1348.xx. At the beginning of the afternoon, VN30 broke below 1348.xx, and the basis turned positive, after which the index rebounded above 1348.xx. That was the standard position closure point. The subsequent rebound again created a good setup for Longs, with a stop loss according to VN30 if the index falls back below 1348.xx. The target for closing half the position is VN30 reaching 1353.xx. The rest rose beautifully to 1359.xx.
Today’s F2 development shows considerable expectations for the underlying market, even when VNI and VN30 plummeted in the morning. The influx of money pushing prices up had a positive effect, changing the psychology of discouragement over the past few days. The opportunity for the indexes to retest the peak areas remains. The strategy is flexible Long/Short, prioritizing Long, and paying attention to the basis.
VN30 closed today at 1362.89. Tomorrow’s nearest resistance is 1368; 1376; 1380; 1387; 1396; 1401. Support is at 1358; 1348; 1341; 1333.
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