Market insight_2017 Correction Trend_20171214

Market development
After reaching a peak of 970 points on December 4th and increased by 46% from the beginning of the year, VN-Index has its strongest corrections in the year, marking the end of the 9 consecutive weeks. The decline in prices over the past 3 years: (1) Average length of about 17 sessions, the longest correction composed of 29 sessions. (2) The average decrease rate is 10.58%. At the moment, VN-Index decreased by 5.73% comparing to its peak during this year.

Market outlook
The current correction occurred during a long period of rally market. The adverse information and rumors is reversing market sentiment, putting pressure on market leading stocks. However, in a strong bull market, the current correction is a necessity. The market is supported by some information which can balance with bad news (the most recent is SAB auction, followed by big auctions of PVN). In spite of the fact that the market is experiencing a negative state for short-tem period, investors believed that the arrests would be handled quickly in ordert to minimize macroeconomic impact and the divestments of state-owned enterprises would be a decisive factor in stabilizing the budget and macro in 2018 so that the market can rebound quickly in short term. However, if the foreign market continue to sell aggressively, the market will require a long period to accumulate to the equilibrium point which could be counted by weeks or even months.