The Flow of Funds: Another Breakdown, or a Clearer Sign of Correction?

The VN-Index repeated the trading week of late May when it initially surpassed the new peak at the beginning of the week, then weakened at the end of the week and lost the 1,330-point mark. The group of medium and small-cap stocks that had been heated were also strongly profit-taking…

Experts have been cautious since last week, and with new developments this week, they further reinforced the view that the market is at risk of entering a correction phase. However, opinions on the adjustment process differ. Optimistic views assess that this is still just a normal break and the cooling-down process will be healthy as long as the 1,320-1,300 threshold is maintained. A cautious view holds that the outcome of the trade negotiations will play a decisive role.

Regarding the market’s reaction to the third round of trade negotiations, experts opined that the market is hesitating partly because it is waiting for developments from mid-June onwards. The neutral scenario is what experts are expecting, with the hope that favorable agreements for both sides will be established. A positive scenario is also possible but is assessed as the least likely, especially with recent new developments.

Experts are also maintaining a balanced portfolio and taking profits on codes that have risen sharply. Short corrections should also only bottom out moderately around the 1,300-point mark and wait for signals from the trade negotiations.

Nguyen Hoang – VnEconomy

VN-Index once again surpassed the new peak at the beginning of the week, then turned back quite similar to the previous week. Thus, in 10 sessions, the index still could not break through. In the previous discussion, you were still waiting for further developments this week to have a more accurate assessment of the risk of failed peak testing. With the new developments, what is your opinion now?

Nghiem Sy Tien – Investment Strategy Officer, KBSV Securities

Selling pressure at the peak is real and is increasing, indicating that the short-term profit-taking psychology is becoming more dominant. The risk of “failed peak testing” and entering a clearer correction phase in the short term has increased significantly compared to the previous week. Although capital still has differentiation and flows to some stocks with their own stories, overall, the technical momentum of the general market is weakening.

Nguyen Viet Quang – Business Director, Yuanta Securities

VN-Index continued to fail to conquer the resistance level of 1,350 points after 10 sessions, similar to the movement of the previous week. The two peak touches and turns, along with weak liquidity, indicate that the market still lacks catalysts to conquer new peaks. Technically, if the VN-Index does not surpass 1,350 points and there is negative information about trade negotiations, there is a risk of forming a double top pattern, signaling a deeper correction.

Nguyen Thi My Lien – Head of Analysis, Phu Hung Securities Company

The movement during the week showed that the VN-Index recovered with a higher peak than the previous week, but the technical indicators continued to weaken, signaling a stronger trend divergence.

With the declining session at the end of the week, I think the index has confirmed entering the adjustment phase. However, I expect the “cooling-down” process to be healthy, as liquidity has not really surged to create pressure. The movement is likely to lean towards sideways fluctuations.

In mid-June, the third round of trade negotiations on countervailing taxes between Vietnam and the US is expected to take place. If the results are favorable, we can completely expect a market surge. In case the unknowns are still unclear, the support threshold that investors need to pay attention to is around 1,315 – 1,320 points. A deeper retreat will signal the risk of continued decline.

Le Duc Khanh – Analysis Director, VPS Securities

The consecutive rising sessions in May caused many stocks to approach important psychological resistance areas. The general market also touched the strong resistance zone of the past 3 years, and the series of rising/falling adjustments fluctuating around the 1,330 – 1,350 point zone also took place in many sessions, which can be said to be a necessary resting stage. I think the market is only temporarily accumulating balance from the support band of 1,325 – 1,330 – 1,340 points before returning to the 1,340 – 1,350 point mark. The VN-Index is still just temporarily adjusting and accumulating before heading to a new peak with many industry groups taking turns leading the market.

Nguyen The Hoai – Branch Director of Dong Nai, Rong Viet Securities

My positive mid-term view remains unchanged, but it is really difficult to give an opinion on the short-term market. After a strong recovery, the market has entered the old peak area, profit-taking is taking place, and market psychology is starting to be cautious. Investors need to pay attention to a reasonable portfolio ratio.

Nguyen Hoang – VnEconomy

Liquidity is showing a significant decrease in the unsuccessful breakthrough sessions. The price increase in the group of medium and small-cap stocks has also slowed down, most of them only increased in the first 2 sessions of this week but by the end of the week, many codes had corrected quite strongly. Is this a sign of capital withdrawal?

Nguyen Thi My Lien – Head of Analysis, Phu Hung Securities Company

I do not think that capital is showing signs of withdrawal, but it only reflects the hesitant psychology dominating the high-price zone. The market has had a good recovery phase, driven by optimism about trade progress. But recently, quite a lot of information has turned contrary, and uncertainties still exist, so the market needs to slow down to evaluate. Therefore, the buying capital will need new and clearer catalysts, while the selling pressure is present.

Liquidity this week decreased compared to the previous week but still maintained above the 20-session average, with an average matching order volume of about 20 trillion VND on HoSE. This shows that there is still supportive buying power, and there is no signal of a sudden surge in supply. I think this adjustment is a normal reaction in the market’s movement.

Nghiem Sy Tien – Investment Strategy Officer, KBSV Securities

The sharp decline in liquidity in the sessions when the market tried to go up but failed showed that buyers were very wary of risks and lacked the determination to push prices higher. At the same time, strong profit-taking in the group of medium and small-cap stocks after a hot increase is a very normal development, reflecting the psychology of prioritizing profit protection when the general market shows signs of weakening.

I think smart money is not necessarily leaving the market, but may be temporarily resting in cash, waiting for a new balance point or looking for truly solid opportunities. This phase requires patience and skill in stock selection based on fundamental factors instead of chasing trends.

Nguyen The Hoai – Branch Director of Dong Nai, Rong Viet Securities

The group of medium and small-cap stocks has a fairly high speculative nature, so after a strong increase, there will be a period of adjustment, which is normal. But whether this is a sign of capital withdrawal, I think it’s not yet. To end the increase of this group, there need to be 2-3 more such rhythms.

Nguyen Viet Quang – Business Director, Yuanta Securities

The sharp decline in liquidity and the strong correction of medium and small-cap stocks at the end of the week are signs of speculative capital withdrawal, especially for codes that have risen sharply since the bottom of April. The decline in liquidity also shows a lack of consensus among buyers, with weak buying power and increasing selling pressure in the last sessions of the week. Typically, foreign investors bought a net amount of 908 billion VND on June 3 but immediately sold a net amount of nearly 2.5 trillion VND in the last 2 sessions of the week, indicating short-term trading behavior rather than long-term investment commitments at this time.

Le Duc Khanh – Analysis Director, VPS Securities

I think the participating capital in the market temporarily “stalled”, especially in the adjustment and accumulation phase – which we also witnessed in many adjustment sessions in previous periods. Liquidity will increase again when the market recovers and gains in the following weeks.

Nguyen Hoang – VnEconomy

The important round of trade negotiations is about to take place, and the fact that the market is being held high is also a signal reflecting positive expectations for the results. Everyone hopes for optimism, but what do you expect the market’s reaction to be in the different scenarios?

Nguyen Thi My Lien – Head of Analysis, Phu Hung Securities Company

With the efforts of the Government, I expect the negotiation results to be optimistic. In the positive scenario, when the tax rate is reduced to a low threshold, the market can break through the old peak, around the 1,500-point threshold. In case the results turn out to be less favorable, the movement is likely to return to test the 1,200-point mark.

I think the market psychology has stabilized, so it is difficult to have a strong sell-off like in early April. The 1,200-point area will play a good supporting role. In the base case scenario, I expect the market to fluctuate within the range of 1,270 – 1,380 points when the results are at a neutral level.

Nguyen Viet Quang – Business Director, Yuanta Securities

As analyzed, whether the VN-Index can conquer the strong resistance level of 1,350 points depends largely on the results of trade negotiations with the US. In the case of an unfavorable scenario, the market forms a “double top” pattern and the risk of a deeper correction than the dip in early April when the news is announced.

However, with the scenario agreed upon by the majority of investors now being optimistic about the positive developments in the negotiations, the return of foreign capital inflows, along with the uptrend in the past month, will pull the market above the resistance level and form a new uptrend in the medium and long term.

Le Duc Khanh – Analysis Director, VPS Securities

I think the trade terms, tax policies will be flexibly adjusted towards mutual benefits for both sides, of course, still better than the early stage when Vietnam was taxed at a high countervailing rate. Perhaps a scenario in which both sides find common ground and make some concessions is what we hope will be good for the economy as well as the trading psychology in the stock market. Let’s not forget that Vietnam is having a lot of supportive information, not just depending on the results of this round of tax negotiations.

Nghiem Sy Tien – Investment Strategy Officer, KBSV Securities

The most optimistic case is that the results are as expected, the market may only have a short-term excitement, and then face huge profit-taking pressure due to the “news out, sell” effect because prices have largely reflected expectations before. Conversely, if the results are vague and there is no clear breakthrough, disappointment will cause the market to quickly enter a significant correction phase to find a lower balance point. The worst-case scenario is that the negotiations fail, which will definitely trigger a sell-off across the board due to broken expectations.

Nguyen The Hoai – Branch Director of Dong Nai, Rong Viet Securities

The market is facing difficulties at the old peak area, to break through the peak successfully, the sessions with high liquidity are needed. With what is happening, the market may not be able to break through immediately and is undergoing adjustments. The scenario of retesting the 1,300 region is possible.

Nguyen Hoang – VnEconomy

Short-term speculative opportunities are quite challenging when strong stocks have risen sharply, weak stocks only fluctuate within the T+ period. Fundamentals are still waiting for the results of the negotiations. What should investors do now? What is your current stockholding ratio?

Le Duc Khanh – Analysis Director, VPS Securities

Last week was still a cautious trading week, and it was necessary to control the number of stocks held to reserve part of the money to reinvest in the latter half of June or further in the third quarter and the last months of 2025. Short-term trading opportunities are more difficult, especially in the market’s adjustment and accumulation phase, although buying and holding stocks is considered a better strategy.

The stockholding ratio can be at a moderate level or slightly higher, which is not a big problem. Stock selection to buy should focus more on stocks with good business results, leading stocks in each industry group.

Nghiem Sy Tien – Investment Strategy Officer, KBSV Securities

In my opinion, this is the best