From a technical point of view, SSI Research believes that the market is showing cautious signals in the short term and VN-Index may fluctuate within a range of 1,400 - 1,480 points for the rest of November.
The market is showing cautious signals in the short term and VN-Index may fluctuate within a range of 1,400 - 1,480 points for the rest of November. / Source: CafeF
In its November market strategy report, SSI Securities Research Center (SSI Research) said that the reason for the breakout of the Vietnamese stock market in October was the favorable policy environment.
Specifically, the loose monetary policy maintains the advantage for the securities investment channel, and the fiscal policy has the ability to expand, creating a driving force for the economy to recover; Those are the two key factors keeping the exciting pace in the market.
On the other hand, the growth of profit realized on HOSE in the third quarter with the number of reports as of November 4 reached 21.6% over the same period, although significantly slowed down compared to the 65.1% growth in the second quarter but still a very encouraging level.
Profit growth diverged as it recorded a marked slowdown in industries related to domestic demand such as retail, beer, cars/motorcycles, oil and gas, and banking, while some industries benefited from commodity prices that still recorded strong growth such as iron and steel, sugar, fertilizers, and chemicals.
SSI Research's analysis team said the third-quarter business results were largely reflected in the share price and overall market score in October.
The stock market will remain active even though short-term space is limited
In the short term, SSI Research believes that the upward momentum of the market in November may slow down if there is no really big impact factor. The main focus of November is the meeting of the 15th National Assembly, in which the main focus is on the economic-fiscal plan for 2022 and the economic recovery plan for the period of 2022 - 2023.
In terms of valuation, the current P/E and P/E 2021 of VN-Index are at 16.8 times and 16.6 times, showing that the short-term growth potential of the index may not be much, especially in the context that the busiest period of the third quarter business results season has passed.
Even so, the securities company assessed that the market will still maintain its excitement with stories surrounding the new economic stimulus package, the story of accelerating public investment disbursement as well as the recovery of business activities in production and consumption after the lockdown period.
These factors will be the driving force for fourth-quarter profit growth as well as the outlook for 2022. The VN-Index's 2022 P/E is currently at 13.65 times, which is a very attractive level.
VN-Index fluctuated in range of 1,400 - 1,480 points in November
After conquering the upper edge of the triangle pattern (formed from the end of July to the beginning of September), VN-Index has continuously formed new historical peaks. Ending the session on November 4, the index closed at 1,448.3 points, temporarily regaining equilibrium after the previous correction with a record volume.
Based on the Elliot pattern, VN-Index is moving in bullish wave 5 (wave 1 was formed from August 2020). In this period, the index is likely to face short-term swings and corrections due to high selling price.
According to analysts of SSI Securities, VN-Index may fluctuate in a range of 1,400 - 1,480 points for the rest of November.
For short-term trades, investors are recommended to consider lowering the weighting at the upper boundary of 1,480 points and increasing the weight again when the VN-Index retreats to near the 1,400 point area along with signals of supply and demand release. to manage risks well and achieve expected returns.
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