Experts Warn of Deeper Pullback Driven by Blue-Chip Profit-Taking, Urging Investors to Shift Focus from Short-Term Gains to Preparing for the Next Growth Cycle.
The VN-Index is flashing clear signals of a sharp correction, with analysts forecasting a potential breach of the critical 1,600-point psychological support level as massive profit-taking pressure swamps market momentum. This pullback, heavily concentrated in heavyweight stocks like Vingroup (which single-handedly dragged the index down significantly), signals a necessary, albeit painful, rebalancing away from stocks that have already experienced meteoric gains. Global economic stability factors—including a positive US-China trade framework and expected Federal Reserve rate cuts—are currently being overshadowed by domestic portfolio adjustments and uncertainty surrounding major corporate Q3 earnings reports.
The Correction Catalysts: Vingroup and Foreign Selling
The primary driver of the recent volatility is the massive correction in Vingroup shares, which erased the majority of the group’s contribution to the index earlier in the month. Experts see this not as an outright negative, but as a healthy dispersion of capital, preventing over-concentration in a few mega-caps. However, the broader market faces systemic headwinds: relentless foreign net selling, which has persisted for 15 consecutive weeks totaling nearly 129 trillion VND, and a noticeable decline in trading liquidity, averaging only 37 trillion VND in October.
Nguyen Tan Phong from Pinetree forecasts a “20–30% correction” for high-fliers is normal, giving the VN-Index a real chance of testing support levels around 1,570 points. Technical analysis suggests that while the index remains above crucial medium-to-long-term indicators like the MA100 and MA200, the short-term mood remains bearish until the major index anchors stabilize.
Strategy: Conserve Capital for the Next Wave
The consensus among leading analysts is a pivot from aggressive trading to risk management and portfolio restructuring. Nguyen Tien Dung of MB Securities advises against averaging down on currently declining stocks, stressing that this is the time to preserve capital and position for the next cycle. He suggests a conservative portfolio allocation, maintaining an equity exposure of approximately 50%.
The expected rotation of capital is clear: funds are anticipated to move out of the recently overbought sectors and into previously overlooked segments that show attractive valuations and improving fundamentals. The MBS expert specifically flagged the banking sector (e.g., CTG, ACB) as a continuing pillar of support for the overall market structure. However, new opportunities for the coming cycle are emerging in sectors that have “lagged the market” but show strong underlying health, including technology/telecom (CTR, VGI), energy(HDG, POW), and oil & gas (GAS, PVD).
This consolidation phase is viewed by most experts as a necessary re-accumulation period following the market’s four-month ascent, not the start of a sustained bear trend. The crucial inflection point remains the 1,600–1,620 point area; a decisive break below this zone is considered a low-probability, high-impact negative scenario that could force a test of 1,550 points before the year closes. Investors must be disciplined now to capitalize when the market identifies its new leadership for the next growth phase.
Source: Vietnam Insider