1,050-point resistance territory challenges VN-Index

The VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE), is forecast to move around 1,050 points until there is new information affecting the market.

After two weeks of strong declines from the 1,100-point range, the VN-Index had a week of bouncing back from the territory of 1,010 points with improved liquidity and good recovery of almost all groups of stocks.

The market opened the March 6-10 trading week in green with investors' caution, and then rebounded strongly in Wednesday and Thursday sessions, helping the benchmark index re-approach the resistance territory of around 1,050 points.

In the past week, the securities, aviation and tourism stocks led the market with an increase of approximately 5%. The large-cap stocks also made positive contributions to the VN-Index recovery.

Closing the trading week, the VN-Index surged 28.23 points, or 2.75%, to 1,053, and the HNX-Index on the Hanoi bourse expanded 2.97 points, or 1.45%, to 207.86.

Trading value on the HoSE increased by 14.4% from the previous week to nearly VND43,055 billion ($1.82 billion), corresponding to a rise of 7.2% in trading volume to 2,439.28 million shares.

The respective figures on the Hanoi Stock Exchange (HNX) were 7% and more than VND4,666 billion ($197.08 million) in trading value, and 11.8% and 325.17 million shares in volume.

SAB of brewer Sabeco, PLX of Petrolimex and KDC of Kido Corp. had the most negative impact on the VN-Index during the week, while MSN of Masan Group, VPB of VPBank, VHM of real estate developer Vinhomes, and CTG of VietinBank showed the most positive influence.

Foreign investors turned net buyers on both exchanges to the tune of VND914.76 billion ($38.64 million) on the HoSE and VND95.14 billion ($4.02 million) on the HNX.

Saigon-Hanoi Securities analysts said that the VN-Index is about to reach the support level of 1,050 points and is in danger of returning to the mid-term downtrend.

According to technical analysis, the market is still in a retracement wave after exiting the downtrend and the correction after a strong recovery period is normal, they noted.

The group argued that after the current correction, the market is expected to continue recovering and finding its balance for medium-term accumulation. In the short term, the positive movement of some leading stocks, especially those in the banking sector, pins a hope that the VN-Index will not return to the downtrend and move towards the strong resistance territory of 1,150 points.

In the near future, the market cannot create an uptrend, but will simply move in a retracement wave and need another period of balance and accumulation. In general, the current stock prices are quite attractive for medium- and long-term investment.

"Investors should pay attention to strong stocks that tend to accumulate, recover soon and continue to maintain their uptrend as well as those of leading firms that maintain profit growth and have bright growth outlook this year. They can take advantage of the current market correction to increase disbursement," they said.

Meanwhile, Vietcombank Securities recommended that investors keep a close watch on the market developments and have plans to take profits from stocks whose uptrend has showed signs of weakening in some recent sessions.

"They should limit the purchase of new shares before the VN-Index successfully breaks out of the current resistance level of around 1,050 points," it said.