Two scenarios for VN-Index

The stock market trading session on April 21 recorded a familiar pattern, with the market opening positively early in the session and gradually weakening toward the end. The VN-Index closed at 1,833.48 points, a slight decrease of 0.2% compared to the previous session.

Enterprises in the electricity sector will have strong growth opportunities, opening up many attractive investment opportunities in the stock market.

When the market rises, cash flow must spread widely to lift the general price level of stocks; however, at the moment, the index is approaching its peak while cash flow is weakening across the board.

According to data from VNDirect, market breadth leaned heavily toward the negative, with 227 declining stocks, accounting for 59.4%, while there were only 99 advancing stocks. This shows that the majority of stocks are not moving in tandem with the index, creating a "green surface, red interior" state.

Typically, when the market increases, cash flow must spread widely to raise the price level of stocks. However, at present, the index is nearing its peak while cash flow is weakening extensively. Notably, order-matching liquidity reached 21,800 billion VND, up 21% from the previous session. Nevertheless, this increase in liquidity did not accompany a price breakout, suggesting that selling pressure at the peak is dominating rather than new cash flow entering the market.

Mr. Nguyen Xuan Thinh, an analyst at VNDirect, pointed out that cash flow in the market is currently restricted by three strategic factors.

First is the cautious sentiment regarding geopolitical variables. Although the market has somewhat "grown accustomed" to tensions in the Middle East, especially regarding Iran, institutional investors are still waiting for a clearer signal, such as a formal stability agreement or commitment. As long as macro risks remain "unresolved," large capital flows are unlikely to be disbursed strongly.

Second is the weakening momentum of leading stock groups. Expectations regarding the market upgrade story have largely been reflected in prices. The securities and banking groups, which were once the frontrunners, are no longer maintaining strong growth momentum. Except for a few individual stocks like HCM, major stocks such as SSI or VND are entering a sideways phase, showing that new demand is no longer abundant.

Third, although deposit interest rates have decreased by 0.1-0.5% in some terms due to management policies, lending rates remain high. This prevents capital costs from decreasing correspondingly, limiting short-term investment expansion capabilities. Forecasts indicate that interest rates may be at a "U-shaped" bottom and can only decrease more clearly in the second half of the year.

“Currently, the VN-Index is entering a strong resistance zone of 1,860-1,880 points, where previous peaks and downward channels converge. This is considered the decisive zone for the market's short-term trend.

Scenario one, with a low probability of about 20%, is that the index continues to be pushed past 1,880 points thanks to blue-chip stocks. However, as cash flow remains concentrated locally in certain codes like NVL, HCM, or STB, the majority of the market will not benefit.

Scenario two, which is evaluated as more likely, is that the market will adjust back to the ,1720-1,730 range to retest the previous breakout zone (from the April 14 session). This could be a necessary corrective move to rebalance supply and demand and create a more solid foundation,” Mr. Thinh predicted.

In the context of strong market differentiation, according to the expert, portfolio management strategy should focus on selective stock picking rather than broad holdings.

• Leading stock groups such as VIC, Novaland, TCH, HCM, or STB still maintain relative strength. Investors can continue to hold and only consider increasing their proportion when these stocks adjust to support levels.
• Mid-tier stock groups like SSI, HPG, MWG, or SHS are moving within a narrow range. For this group, the appropriate strategy is to trade according to price ranges—buying at support and selling at resistance—rather than expecting a strong uptrend.
• The oil and gas group is currently under heavy pressure due to a high volume of "trapped" investors. This group may need a sharp "shake-out" decline before it can form a sustainable recovery trend.

In a context where liquidity does not truly support an uptrend and the market is extremely polarized, the stock proportion should be maintained below 50% to ensure room for maneuvering when the market fluctuates. Chasing prices at the 1,860-point resistance level should be strictly limited; instead, priority should be given to optimizing existing portfolios through short-term trading.

“Increasing the proportion should only be carried out when there are clear signals of cash flow spreading—specifically when at least two major industries (e.g., banking and steel) increase together with improved liquidity,” Mr. Thinh noted.