Market remains bullish but investors should be cautious, experts warn

Vietnam’s stock market recorded a weekly gain despite a decline of the market benchmark in the last session. 

 Analysts from securities firms expected the market to continue its rally but recommended investors be more cautious and prioritise risk management at this moment.

Market remains bullish but investors should be cautious, experts warn
Worker are moving products at one of Petrovietnam Fertilizer & Chemicals Corporation (DPM)'s warehouses. DPM shares posted a big gain last week. Photo dpm.vn

The VN-Index rose nearly 41 per cent on big stocks’ appeal on the first trading day after the Tet holiday. The market reopened last Wednesday after a week off.

The index continued its rally last Thursday despite some corrections during the session. But it reversed course in the last trading session due to selling pressure and finished lower.

On the Ho Chi Minh Stock Exchange (HoSE), the benchmark ended Friday at 1,173.5 points, down 0.07 per cent. Meanwhile, on the Hanoi Stock Exchange (HNX), the HNX-Index climbed 0.1 per cent to 231.18 points.

According to MB Securities Co., the decrease in the last trading session was nothing compared to the plunges in regional markets. Actually, the loss was an effort of recovery after dropping nearly 15 points in the early session.

MB Securities assessed the movements as signs that the market is still relatively strong and the correction of the last session couldn’t affect the market’s bullish sentiment. The company recommended that investors prioritise managing risks, cut margins, stop using dollar-cost average and rebalance investments’ proportion.

Mirae Asset Vietnam Securities said the VN-Index could hit a resistance territory of 1,175 – 1,200 points in the short-term and selling pressure might be stronger at this level.

“However, there is a possibility that the index might soon beat this resistance territory and head to higher levels,” Mirae Asset added.

Based on the Elliot Wave principle, analysts from Saigon - Hanoi Securities JSC said the VN-Index was in wave 5 with a target of trading around 1,250 points, so the possibility of gaining points this week would be high.

 

Under Elliott Wave theory, the most basic pattern of market progress is the motive wave, which is subdivided into five waves and labelled with numbers. Wave 1, wave 3 and wave 5 move in the direction of impulse, while wave 2 and wave 4 act as retracements.

But the market might face fluctuations in the first sessions of the week as the VN-Index ended last session at 1,170 points.

For the week, the VN-Index increased 58.57 points, while the HNX-Index climbed 6.28 points.

The market’s liquidity was higher than the week before the Tet holiday, but still under its 20-day moving average. Around VND16.2 trillion in shares was traded on both exchanges per session.

Last week, material stocks group was the biggest gainer with 7.8 per cent capitalisation. The main driving forces for the gain were its main stocks such as Hoa Sen Group (HSG) up 4.8 per cent, Hoa Phat Group (HPG) up 3.9 per cent, Nam Kim Steel JSC (NKG) up 8 per cent, and Petrovietnam Fertilizer & Chemicals Corporation (DPM) up 9.4 per cent.

Other sectors from utilities, banking to information technology (IT) also witnessed great performance after Tet.

Foreign investors returned to the market, buying a net value of nearly VND1.2 trillion in shares last week.  They were net sellers in the last two sessions before the market closed for Tet. VNS

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