Following a prolonged period of volatility, the VN-Index is approaching a critical resistance level, raising the question of whether the market has enough momentum to break through or if it is merely undergoing a technical rebound before further corrections.

By the end of the last trading session of the week, the VN-Index gained 9.53 points, or 0.78 per cent, closing at 1,228.1 points. Meanwhile, the HNX-Index slightly declined by 0.24 points, or 0.1 per cent, to 221.29 points compared to the previous week.

Market liquidity has not fully improved, with trading volumes on the HoSE dropping by approximately 17 per cent, reflecting investor caution. Furthermore, the market showed significant divergence, with recoveries concentrated in banking, retail, finance and particularly telecommunications sectors, while other sectors exhibited no clear signs of recovery.

Foreign investors maintained strong net-selling activities, with a total net value of nearly VNĐ5.199 trillion on the HoSE. However, the scale of net selling gradually decreased and foreign investors even turned to net buying towards the end of the week. Key purchases included HDG and TCB stocks, offering positive signals for foreign investment inflows.

Head of Analysis at Saigon-Hanoi Securities (SHS), Phan Tấn Nhật, noted that the VN-Index is in a recovery phase after a sharp decline. He expects the index to test resistance levels around 1,230 and 1,250 points while finding support at approximately 1,220 points. Regarding the VN30-Index, Nhật highlighted the need for stronger momentum and improved liquidity to surpass the 200-day moving average at around 1,290 points.

"The stock market has experienced a volatile year within a narrow range, pressured by strong foreign net-selling, exchange rate fluctuations and capital outflows from the real estate sector. However, the market's medium-term fundamentals are gradually improving, with many stocks and sectors at attractive valuations, presenting new investment opportunities," Nhật observed.

He forecasted strong market divergence, with the VN-Index likely forming a floor around 1,200 points—the 2018 peak level—and recommended investors maintain balanced portfolios. He advised prioritising investments in fundamentally sound stocks with strong third-quarter results and promising growth prospects.

A report by Vietcombank Securities (VCBS) highlighted the potential for increased short-term profit-taking pressure. Indicators suggest that the market may continue to experience fluctuations during its recovery. Currently, the VN-Index is nearing its 20-day moving average with a short-term resistance at 1,240 points.

However, VCBS analysts noted that if liquidity and inflows improve in the coming week, the VN-Index could target the 1,240–1,242 point range.

VCBS experts advised short-term investors to exercise caution, consider profit-taking for stocks that have reached their targets and monitor for signs of weakening. They also suggested using market fluctuations to engage in short-term trading, focusing on stocks attracting capital, such as banking, retail and tech-telecom sectors.

On the other hand, medium to long-term investors were encouraged to hold onto stocks with strong profitability and potential price appreciation based on fourth-quarter performance expectations. Additionally, they recommended selectively increasing exposure during market dips, especially in leading stocks with strong fundamentals and positive business results.