VN-Index approaches 980-point resistance level
VN-Index approaches 980-point resistance level
The Vietnamese market is expected to move modestly this week as VN-Index approaches its difficult resistance level of 980 points, analysts said.
The benchmark VN-Index on the Ho Chi Minh Stock Exchange inched up 0.08 per cent to end Friday at 976.48 points, totalling a weekly rise of 2.1 per cent after five straight trading sessions of gaining.
Last week was the strongest gaining week of VN-Index in almost 12 weeks.
Liquidity recorded high level in eight weeks with an average of nearly 177 million shares traded in the southern bourse in each session, worth VND3.8 trillion (US$162 million).
On the Ha Noi Stock Exchange, the HNX-Index decreased by 0.28 per cent to close Friday at 105.79 points, witnessing a weekly increase of 0.07 per cent.
An average of nearly 36.4 million shares were traded in the northern bourse in each session, worth VND489 trillion.
The domestic market moved in reverse compared to the global market but still remained up despite the escalating trade tensions and foreign net selling of nearly VND1 trillion, MB Securities JSC analyst Ngo Quoc Hung told tinnhanhchungkhoan.vn.
“With an increase of 2.51 per cent, Viet Nam's stock market ranked second after the Russian market in the top of the world's best performing markets in the past week,” Hung said.
Technically, the VN-Index would have to struggle when moving nearer to the strong resistance zone around 980 points. In the last two sessions of last week, the VN-Index failed to overcome this landmark. Besides, there is little support information for investors in the country while the development of external markets was still unstable, Hung said.
After a series of increases, it seems the market begun to slow down and accumulate more before continuing to increase, Hung said.
Therefore, it is likely that this week, the indices may continue to face difficulties when trying to conquer the 980-point level, and may experience some alternate volatility and corrections while moving up, he said.
In case foreign investors continue to be net sellers and the world market does not show any positive signs, the domestic market may re-test the 960-point level, Hung added.
According to Hung, the securities group of stocks has increased in the last trading sessions. This group had previously dropped nearly 9 per cent since the beginning of the year. Therefore, when the market flourished in last week, bottom-fishing cash flow returned to the groups which had fallen sharply. Meanwhile securities companies will soon introduce new products, covered warrants and future contracts.
With the issuance of these new products, securities companies will improve their business results. Therefore, they will receive the attention of investors, Hung said.
According to Bao Viet Securities Company, the market is expected to rally and accumulate around the resistance zone of 980-983 points early this week before experiencing choppy trading toward the weekend.
“The market needs to pass this zone to head toward a stronger resistance zone at 993-1,000 points in the short run. However, if the market is not passing the resistance zone 980-983 points early enough, supply pressure may rebound, and the markets decline may be present again in the short run,” BVSC said in its Fridays report.
“As the market has not been able to pass 980-983-point resistance zone, we leave open the possibility that markets recent gains are only technical,” BVSC said.
