An impressive reversal unfolded during the futures expiration session. It’s unclear whether this was a pull-up effect, but the recovery was widespread, well-led, and supported by strong buying pressure.
According to regulations, the final settlement price is calculated from the last 15 minutes of continuous trading and the ATC session. However, the market recovered right at the beginning of the afternoon session, with gains sustained until the end and broad participation. Even if there was some index manipulation, the positive outcome reflects a return to more open and active trading.
Order placement and size always reflect risk appetite the best. The aggressive buying style witnessed this afternoon indicates a high level of proactiveness. The broad participation also showcases a similar mindset, despite variations in individual stock recovery speeds.
The improved liquidity in the afternoon, along with the range and direction of prices, indicates a healthy alignment of factors. This is the true significance of the “wicking” candles.
Before today’s reversal, the market went through a narrow-range session with minimal volume (12.5 trillion VND) and even lower volume this morning. The only caveat this morning was the slightly wider downward range for stocks; a narrower range would have signaled stronger momentum. Nonetheless, the outcome was still positive.
It appears that money has been waiting on the sidelines for the October expiration to pass before making any significant moves.
Technically, today’s reversal bodes well, maintaining the upward trend since August for the VNI. 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 downward moves become shorter in duration, smaller in range, and closer to the resistance level, the chances of breaking through it increase.
However, it’s important to note that indices have their own narratives, and a breakthrough would be ideal as it would create broad consensus and shift the mindset of conservative investors. Opportunities still lie in specific stocks, and even in a positive scenario, these opportunities will differ. Therefore, focus on your portfolio first. Stocks that have undergone minor adjustments within their typical fluctuation range are strong. Those forming bottoming zones are also worth considering. It only takes a few more positive sessions for the lethargic, pessimistic, and discouraged sentiments 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, 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 shorts could set their stop-loss by following the VN30 back 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 ideal point to close the position. The subsequent rebound again created a favorable setup for longs, with a stop-loss if the index retraced below 1348.xx. The target for closing half the position was VN30 reaching 1353.xx, and the rest performed well up to 1359.xx.
Today’s F2 development showcases a considerable expectation for the underlying market, even amid the morning plunge in the VNI and VN30. The positive impact of inflows changing the pessimistic sentiment of the past few days is evident. The indices still have the opportunity to test the peak zones. The strategy is to be dynamically long/short, favoring longs, and mindful of the basis.
VN30 closed today at 1362.89. Tomorrow’s resistances are 1368; 1376; 1380; 1387; 1396; 1401. Supports are 1358; 1348; 1341; 1333.
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