Investors are recommended to closely follow market movements in the coming week and limit disbursement of cash before the VN-Index successfully breaks out of the resistance area of 1,050 points.
VN-Index experienced a volatile trading week, from March 13-17, with mixed good and bad news in the world and the country.
The market opened the week with a swoon and then recorded a strong drop of nearly 13 points in the second session on Tuesday.
However, the main index suddenly reversed to increase sharply by 22 points and surpassed 1,060 in the fourth session on Wednesday thanks to bottom-fishing demand as well as the information of the State Bank of Vietnam reducing some policy interest rates. However, red quickly returned to VN-Index in the last two sessions of the week.
Ending the last trading week, VN-Index closed at 1,045.14 points, down 7.86 points, or 0.75%, compared to the previous week.
Liquidity improved above the average level with trading value on the Ho Chi Minh Stock Exchange (HoSE) rising by 20.8% from last week to VND52,014 billion ($2.2 billion). Transaction value increased by 0.5% to VND4,692 billion ($199 million).
This week, foreign investors continued to expand their transactions and maintained a net buying value of VND2,190 billion ($92.84 million) under the positive influence of the Fubon fund.
VCB of Vietcombank, VHM of Vinhomes, VNM of Vinamilk, and HPG of Hoa Phat Group had the most negative impact on the VN-Index in the week. VCB alone removed more than 2.3 points from the index. On the other side, VJC of Vietjet, VPB of VPBank, and HDB of HDBank showed the most positive influence.
Regarding industry movements, real estate stocks, with positive supportive information, maintained good gains during the week like NVL (7.98%), DIG (5.51%), DXG (4%).
Meanwhile, petroleum stocks had the least positive performance under the strong downward pressure of oil price like PLX (-7.21%), PVC (-6.96%), PVD (-5.02%), and PVS (-3.79%).
Saigon-Hanoi Securities Company assessed if the market continues to move sideways or records corrections next week, the gradually tight accumulation trend will prevail, with the VN-Index heading toward the balance area of around 1,050 points.
"The market in the short-term still has opportunity to disburse, but not much. For medium-long-term investments, investors should focus on strong stocks that tend to accumulate, recover soon and continue maintaining the uptrend, and stocks that are leading the industries, still maintain profit growth and continue to show growth prospects this year.
Buying should be done gradually throughout the accumulation process and during correction sessions," the firm suggested.
Technically, Vietcombank Securities (MBS) recommended that investors continue to maintain a stock position of about 15-25% in their account and closely follow market movements in the coming week, and at the same time limit disbursement of cash before the VN-Index successfully breaks out of the current resistance of around 1,050 points.
According to MBS, the market was supported by the news of interest rate reduction but domestic demand showed investor enthusiasm was little. Technically, the market is likely to maintain a sideways state in a narrow range next week, with liquidity also expected to decrease compared to this week. Therefore, MBS advises investors not to surf in the context of low liquidity.