The Stock Market in June: What to Expect After a Brilliant May

The VN-Index witnessed its fourth consecutive weekly gain, ending the week at 1,332 points, a 1.38% increase. Real estate stocks, along with industrial zones, seafood, textiles, steel, and oil and gas sectors, saw positive trading sentiment. In contrast, port and maritime transport, and electricity sectors faced strong selling pressure in the latter part of the week.

Selling pressure intensified as the VN-Index approached its previous peak. Foreign investors also net sold a significant value of 2,706 billion VND on the HoSE. The money flow remains concentrated on a few stocks with unique stories, and the market’s uptrend lacks broad consensus and clear momentum.

May was also the month when the domestic stock market recorded its strongest performance since the beginning of the year. The VN-Index rose 106 points (8.67%), primarily driven by Vingroup stocks and the banking sector. During this month, VIC shares surged by 42%, while VHM gained 31%, significantly contributing to the market’s recovery.

After the sharp rise of more than 100 points in May, short-term profit-taking pressure has increased considerably at the strong resistance level of 1,320-1,340 points.

Analysts from Viet Capital Securities (VFS) forecast that around this level, volatility may increase in frequency and amplitude before the market can balance selling pressure at higher prices. The 1,300-point region remains the nearest solid support for the market at the moment.

VFS predicts two scenarios for June. In the first scenario, the market could continue to trade sideways between 1,300 and 1,340 points. Investors are advised to maintain a reasonable portfolio allocation and consider buying on dips to the support region while reducing exposure when approaching the resistance level.

In a more optimistic scenario, if the VN-Index successfully breaks above the 1,330-1,340 range and advances towards 1,400 points, investors should wait for confirmation of the uptrend continuation before investing in stocks from retail, banking, and investment sectors that have not been significantly reduced and show quick recovery.

Meanwhile, Asean Securities offers two scenarios for the short-term outlook. In the optimistic scenario (30% probability), the market will break through the 1,340-point level and continue its upward trajectory. However, in the neutral scenario (70% probability), selling pressure is expected to increase as the index approaches strong resistance, causing the VN-Index to fluctuate between 1,300 and 1,340 points. Technical indicators, such as EMA, suggest that the uptrend remains intact, but RSI indicates overbought conditions, warranting caution.

Looking ahead to the upcoming trading week, VNDirect Securities experts anticipate that the market will likely continue its accumulation trend to absorb profit-taking selling pressure while awaiting new supportive information. The 1,340-1,350 zone is expected to remain a strong resistance level in the short term, especially with foreign investors net selling significantly in recent sessions.

On the other hand, the 1,300-1,320 range will serve as a market support. Given the ongoing market fluctuations, investors are advised to maintain a moderate equity exposure and consider taking profits on stocks that have experienced substantial gains recently.

If the VN-Index retraces to the 1,300-1,320 region, investors may consider selective buying opportunities with a low percentage at stocks that have not fully recovered to early April levels (before the US announced countermeasures), such as banking, securities, steel, textiles, and seafood sectors.