The stock market is in bad shape, investors should not buy at the bottom.

The market suddenly fell sharply in yesterday's session (October 26) in the context that VN-Index was gradually forming a small accumulation base to recover. The strong decline caused the index to lose the basic support levels at 1,100 points and 1,070 points.

Negative information surrounding pillar stocks created overwhelming selling pressure throughout the trading session, along with the highest liquidity increase in the past month, showing investors' panic mentality.

The selling pressure that has been maintained almost throughout the session has left the market with no chance to find any support to hold on to. Perhaps the expectation will come from the "shake-out" session with soaring liquidity and the late-session bounce that will help the short-term trend become less negative.

VN-Index has returned to the beginning of 2023, while monetary policy is still loose, interest rates are low, and business results of enterprises in the third quarter are gradually being announced and have tended to be better than the first two quarters of the year.

From a short-term perspective, yesterday's sharp decline shows that the downward momentum is still strong and the near support level for the VN-Index is in the 1,015-1,045 point range. With the sharp decline, the market is in an oversold state and can recover at any time. However, every recovery is technical and often ends unexpectedly and is difficult to predict.

According to experts from Tan Viet Securities Company, the VN-Index closed the session with a marubozu candlestick pattern with a very strong downward momentum accompanied by a gap down and increased liquidity, signaling a very bad trading session. With a sharp decline, breaking through the short-term balance zone and approaching the lower support in the accumulated price base at the beginning of the year, the market's mid-term trend has officially turned to a downtrend.

The current decrease in points in sync on all 3 time frames means the index is in a bad state and the opportunity to have an immediate increase is very difficult. In the last session of the week, it is expected that the index can narrow the decline again to have the opportunity to form a short recovery to retest the previous balance zone.

SHS Securities Company experts also expressed the view that the market has returned to the previous medium-term accumulation zone and in the short term, VN-Index may continue to decrease points, but with the oversold state, the market may recover technically, but it contains risks. Short-term investors should temporarily stay out to monitor market developments. Medium- and long-term investors can continue to hold their portfolios and wait for the market to stabilize again.

Vietcombank Securities Company (VCBS) recommends that investors proactively increase their cash ratio, maintain a defensive mindset rather than disburse early bottom-fishing at the present time. The VN-Index is still under great pressure from the net selling of many large-cap stocks and will find it difficult to regain equilibrium in the short term.

Source