The fact that the VN-Index recovered strongly from the 1,450-point support level is a favorable sign for the week. Photo: Quoc Tuan

The market began the previous week on April 12th, with a significant drop of about 27 points, with real estate stocks at the forefront of the market's slide. Although the market recovered strongly by nearly 22 points the following Wednesday (April 13), the VN-Index could not stay bullish in the remaining sessions of the week due to significant profit-taking pressure, with the market focusing on many key stocks, though the decrease was not as large as the previous week's opening session.

In terms of both volume and value, liquidity in the session was much lower than the previous week. The VN-Index fell 23.44 points (-1.58 percent) to 1,458.56 points at the close of the trading week.

The fact that the VN-Index recovered strongly from the 1,450-point support level is a favorable sign for the week. However, liquidity is low and has fallen significantly in comparison to recent sessions, indicating that a portion of the capital flow has temporarily retreated, particularly in highly speculative equities. The current adjustment period is appropriate given that several companies have experienced "galloping" rises since mid-2021, particularly in the real estate industry.

Manufacturing stocks that have maintained their profit growth from last year to Q1.2022, such as textiles and garments, fertilizer, furniture, and so on, are still the bright spots of the market. However, because these industry groups have a tiny market capitalization, attracting the same amount of cash flow as in the preceding period is challenging. As a result, VCBS believes that the VN-Index will retest the 1,480-point resistance area this week (around the daily chart's 20-day moving average) and wait for the supply-demand balance to be formed. On the other hand, it believes that the market's divergence will become clearer with the release of stocks' Q1.2022 business results, which will maintain their positive growth trend compared to the same period last year.

Cash flow is expected to return in greater quantity to largecap equities this week, according to VCBS, which are already trading at a big discount. Furthermore, sensible cash flow will continue to pay attention to firms with strong growth in Q1.2022 business outcomes throughout this time. As a result, investors that follow the short-term surfing school might invest in the market's leading stocks, anticipating a general recovery of the VN Index. Meanwhile, in the second quarter and second half of 2022, mid- and long-term investors should consider accumulating companies with deteriorating profit margins, but these should be dispersed gradually and without utilizing leverage during this time.

The VN-Index (weekly chart) developed another bearish full candlestick after last week's bearish candlestick and retreated to the lower Bollinger Band, corresponding to the 1,460 point mark. Even after subtracting the cause of this week's non-trading on Monday (April 11) due to the holiday to commemorate the Hung Kings Commemoration Day, liquidity fell dramatically compared to the previous week. The RSI is still hovering around the 30-70 mark. The VN-Index will continue to amass around 1,500 points within a 50-point range, with 1,420 points as the nearest support level.