"Catching the bottom" will be quite risky for swing traders.

Demand is still quite cautious, leaving open the possibility of a correction trend continuing in the early sessions of next week. Therefore, “bottom fishing” may be quite risky for swing traders when the short-term trend of the market is still down.

Stock market perspective week 11/18-22: "Bottom fishing" will be quite risky for swing traders

Demand is still quite cautious, leaving open the possibility of a correction trend continuing in the early sessions of next week. Therefore, “bottom fishing” may be quite risky for swing traders when the short-term trend of the market is still down.

The market continued to experience a week of adjustment as the pressure on exchange rates and interbank interest rates showed no signs of cooling down. Specifically, the USD Index (DXY) continued to maintain its upward momentum last week due to the reduced expectation that the US Federal Reserve (Fed) would lower interest rates at its meeting in December.

The basis for this expectation comes from information about the US CPI index in October in line with market forecasts, but higher than September 2024 and recent comments by Fed Chairman Powell that the Fed is in no hurry to lower interest rates.

The VND/USD exchange rate has increased rapidly again, approaching the peak in April 2024.

Therefore, the main trend of VN-Index last week remained down with 4/5 correction sessions. Liquidity showed signs of gradually increasing at the end of the week when the market retreated to deeper points and selling pressure was still dominant. On the positive side, VN-Index is returning to the lower channel of the uptrend since the beginning of the year around 1,200 (+/-10) points.

With the RSI indicator retreating to the oversold zone, Agriseco Research believes that the VN-Index will continue to maintain its downward momentum in the first session of the week. However, it is expected that the medium-term uptrend will be maintained and the market will have a technical recovery afterwards. In addition, investors should also consider the scenario of the index breaking through the above support zone to test demand in the context of factors that negatively affect investor sentiment.

Mr. Dinh Quang Hinh, Head of Macro and Market Strategy Department, VNDIRECT Securities Joint Stock Company, assessed that the increase of DXY and US Government bond yields has put pressure on the VND/USD exchange rate and significantly narrowed the monetary policy space of the State Bank.

The fact that the central exchange rate has been continuously adjusted upwards in the past week and the interbank exchange rate has nearly returned to its mid-year peak, combined with the interbank interest rate rising again to over 5%, has negatively impacted investor sentiment as well as the performance of banking, securities, and steel stocks, which are highly sensitive to fluctuations in exchange rates and interest rates.

Foreign net selling, concentrated on bluechips, also increased pressure on stock indices. Selling pressure has intensified recently due to rising capital costs affecting investment performance.

Historical statistics show that the stock market is often under pressure to adjust due to unusual developments in interest rates and exchange rates. However, Agriseco Research believes that the pressure on exchange rates is only short-term and not too serious because: (1) The trend of monetary easing by the Fed and many countries continues; (2) Vietnam's foreign exchange reserves are still at a safe level; (3) Good trade surplus and (4) FDI disbursement and remittances are stable. Therefore, it is expected that the pressure on exchange rates will soon cool down in the near future and help ease investors' psychology.

Accordingly, regarding the upcoming market, Mr. Hinh said that in the context of a lack of strong enough supporting information and no signs of a sustained cooling of interbank interest rates and exchange rates, investors should prioritize portfolio risk management at this time.

For investors with high portfolio weights or using margin leverage, it is necessary to take advantage of technical recovery periods to reduce the weights. For investors with low weights or short-term trading, it is advisable to limit "bottom fishing" when the market has not confirmed the reversal point.

Based on a technical perspective, Agriseco Research believes that the VN-Index fell sharply by 2.71% last week and lost the important support level of 1,240 points (corresponding to the bottom established in September 2024). Liquidity in the correction session continued to increase, demand was still quite cautious, leaving open the possibility of the correction trend continuing in the early sessions next week. Therefore, "bottom fishing" may be quite risky for swing traders when the short-term trend of the market is still bearish.

On the contrary, for investors who want to hold stocks for a long time, the market discount to a reasonable price range will be a suitable opportunity for investors to increase their proportion, especially when many groups of stocks attracting liquidity are returning to the lowest valuation in a period of 1 year, 3 years (for example, the banking group).

In the context of a market with many unpredictable risks, investors should avoid disbursing large amounts, but should divide into exploratory portions to ensure account safety.

Source: https://baodautu.vn/goc-nhin-ttck-tuan-18-2211-viec-bat-day-se-kha-rui-ro-voi-nha-dau-tu-luot-song-d230262.html