Stock Market 3-6: Experts Point Out Dangerous Psychological Traps as Many Stocks Sideways

Vietnam's VN-Index is currently in a technical correction phase after failing to overcome the strong resistance zone between 1,900 and 1,950 points. This period is characterized by declining liquidity and a narrow sideways movement in many stock groups, prompting experts to advise caution.

Hồ Hữu Tuấn Hiếu, an investment strategy specialist at SSI Research, noted that the current market conditions are not suitable for individual investors to use leverage or engage in high-frequency short-term trading. He explained that small losses of 2-3% can lead investors to trade excessively in an attempt to recover quickly. This constant buying, selling, and portfolio restructuring can cause small losses to accumulate, while transaction costs and margin interest rates continue to rise. Hiếu believes this sideways, narrow-range movement is more dangerous than a sharp market decline, as it can trap investors in a cycle of overtrading.

Securities firms like Tiên Phong Securities (TPS) and Saigon-Hanoi Securities (SHS) observe that the index is nearing strong support levels around 1,800 points. TPS suggests that the current correction is mainly due to a lack of buying momentum rather than significant selling pressure. They recommend investors maintain their current holdings and selectively deploy new capital if the market shows signs of stabilizing at the support zone. SHS agrees that the 1,750-1,800 point range is a reasonable valuation, expecting selling pressure to decrease and the market to find balance.

Việt Nam is currently experiencing a period of market consolidation. While short-term trading pressures exist, analysts believe that the current accumulation phase could lay the foundation for a more sustainable upward trend in the future. This cautious optimism suggests that investors should focus on long-term strategies rather than succumbing to the psychological traps of frequent trading during this sensitive period.

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The current sideways movement with a narrow range is more dangerous than a period of sharp market decline. Investors easily fall into a cycle of overtrading.