Experts warn of potential market volatility as VN-Index approaches strong resistance at 1,340–1,360 points

Experts warn of potential market volatility as VN-Index approaches strong resistance at 1,340–1,360 points

After seven consecutive weeks of gains, analysts have started warning about potential volatility and corrections as the VN-Index approaches the strong resistance zone of 1,340-1,360 points.

Customers conduct transactions at SSI Securities Corporation. — Photo mekongasean.vn

The stock market had a vibrant trading week, marking the seventh consecutive week of gains. With strong capital inflows and positive monetary policy signals, the VN-Index continued its upward momentum, setting new highs.

However, analysts are beginning to warn of possible market volatility and corrections as the index approaches the strong resistance zone of 1,340 – 1,360 points.

At the close of an impressive first week of March, the VN-Index settled at 1,326.05 points, up 1.59 per cent from the previous week. Meanwhile, the HNX-Index ended at 238.41 points, down 0.32 per cent from the last trading week of February.

Đinh Quang Hinh, head of Macroeconomics and Market Strategy at VNDIRECT Securities, noted that market gains slowed during the first three sessions of the week due to profit-taking pressure and mixed reactions to US tariff policies on Mexico, Canada and China. However, the market rebounded strongly in the last two sessions, driven by positive domestic developments.

“The State Bank of Việt Nam’s latest actions have led to a sharp decline in interbank interest rates, with overnight rates dropping to around 4 per cent. This has boosted stock market momentum, particularly for banking and securities stocks," Hinh explained.

The VN30 basket – which represents the 30 largest-cap stocks – played a key role in last week's rally. Phan Tấn Nhật, head of Analysis at Saigon – Hanoi Securities (SHS), observed that VN30 outperformed the broader VN-Index, surpassing its 2024 peak thanks to strong performances from real estate and banking stocks.

“After breaking through the 1,300-point resistance, the market remained highly active, with capital rotating strongly into VN30 large-cap stocks. By the end of the week, VN30 had gained 2.46 per cent, reaching 1,389.77 points – a higher growth rate than the VN-Index,” Nhật said.

“The market breadth was also strong, with notable gains across multiple sectors, including rubber, securities, steel, real estate and banking. Liquidity continued its upward trend for the seventh straight week, with HoSE trading volume rising 19 per cent from the previous week, nearing one billion shares per session. This indicates that capital inflows remain strong, with many stocks seeing high demand at elevated prices alongside a surge in liquidity,” Nhật added.

Despite positive market signals, analysts urge caution and risk management, particularly as the VN-Index nears a strong resistance zone.

Hinh cautioned: “With positive market sentiment still prevailing, the VN-Index may continue its upward momentum next week, targeting the 1,340 – 1,360 resistance range. However, this zone has seen heavy historical accumulation, meaning increased volatility and pullbacks are likely.”

To mitigate potential short-term corrections, Hinh advised investors to consider securing partial profits and reducing leverage to safer levels.

For investors who have not yet entered the market or currently hold low stock positions, experts recommend patience, waiting for a market pullback before deploying capital to secure better entry prices and improve cost efficiency. 

Bizhub