KOSDAQ Surge: Normalization of an Abnormal Market…Recommendation to Maintain Semiconductor Stock Weight

Team Leader Hwang Yu-hyun explained that the current surge in the KOSDAQ market is not significantly different from last week and is a process of an abnormal market normalizing. He diagnosed that parts particularly affected by supply and demand issues are recovering due to systemic improvements. The current market is moving past a period of sharp volatility and gradually entering a stabilization phase. Team Leader Hwang predicted that this trend would continue.

The secondary battery sector is currently assessed to have passed its worst period. Team Leader Hwang Yu-hyun stated that he actively traded secondary battery-related stocks recently, explaining that Samsung SDI's performance last week was much better than expected, and LNF also showed satisfactory net profit, although operating profit was ordinary. He analyzed that there has been an assessment throughout the second quarter that secondary batteries have passed their worst, and these performances support this.

The KOSDAQ market, which suffered the most recently, rebounded significantly today. According to Team Leader Hwang Yu-hyun, the KOSDAQ index rose 7% today, and the KOSDAQ 150 index rose even more, with KOSDAQ 150 leverage products surging by about 16% today. This indicates that KOSDAQ stocks, which had been neglected during the market normalization process, are recovering rapidly.

Due to today's surge in the KOSDAQ market, some investors may feel burdened by new purchases. However, Team Leader Hwang Yu-hyun diagnosed that, based on current chart prices, the KOSDAQ index still has a long way to go, considering how much it had fallen and been neglected. Because the KOSDAQ has fallen so much, today's surge might feel somewhat burdensome, but from a long-term perspective, there is still ample room for growth.

Team Leader Hwang Yu-hyun emphasized that investors do not need to be impatient even in a surging market like today's. He advised that even if one currently holds no stocks, there is no need to rush, and a dip opportunity will surely come again in the market. This means it is wiser to observe market trends and approach cautiously rather than chasing the surge and making rash purchases.

Team Leader Hwang Yu-hyun emphasized that now is still the time to hold large-cap stocks like Samsung Electronics and SK Hynix. He explained that a proper rebound has not yet occurred, and the market can shift back to large-cap stocks at any time. He particularly recommended maintaining holdings rather than selling, even if the weighting of Samsung Electronics and SK Hynix is high. His analysis suggests that the market has not completely turned but rather may experience a temporary shift in supply and demand.

Team Leader Hwang Yu-hyun assessed that the market situation in late July was very abnormal, and he expects a general market rebound now. He noted that the last week of July, looking solely at the index, instilled extreme fear in investors, and indeed, many forced sales occurred. However, he explained that the market is now in the process of recovering and rising from that period, with most stocks showing similar recovery trends. This raises expectations for overall market stabilization and rebound.

Team Leader Hwang Yu-hyun diagnosed that leading secondary battery stocks like EcoPro have not yet risen enough. He advised that in a market like this, instead of focusing on valuation, investors should focus on price—who fell a lot and who will rise faster. Therefore, he believes it will be advantageous to invest in stocks that have not yet risen much over the next 1-2 weeks. His judgment is that stocks with price merit are likely to have additional upside potential.

One of the main reasons foreign investors left the Korean market was high volatility. Team Leader Hwang Yu-hyun stated that the volatility index, which individual investors can measure, plummeted by about 8% today. This shows that the leverage effect on the market is gradually decreasing, and the index is also normalizing. Reduced volatility can be interpreted as a positive sign of improved market stability and the potential return of foreign investors.

Currently, while large-cap stocks like Samsung Electronics and SK Hynix are moving sideways, individual stocks are surging, creating an atmosphere as if the market is in a boom. Team Leader Hwang Yu-hyun explained that the market trend expected when Samsung Electronics and Hynix rose significantly is now appearing in the individual stock market. This means the market is shifting from one centered on specific large-cap stocks to one where various individual stocks are actively moving.

Team Leader Hwang Yu-hyun strongly recommended mechanically selling holding stocks when they reach a resistance line. He pointed out that if one does not sell when a stock touches a resistance line, such as the 50-day or 20-day moving average, they might get stuck again, missing the opportunity to catch other rising stocks. He emphasized that if selling all is difficult, selling at least half to secure cash and using it to respond to other stocks is a necessary strategy. This suggests that managing opportunity costs by adhering to a mechanical selling principle is important.

Currently, while large-cap stocks like Samsung Electronics and SK Hynix are taking a breather, other stocks that had been neglected are rising in reverse, leading the market. Team Leader Hwang Yu-hyun explained that stocks that rested when Samsung Electronics and Hynix rose are now all 'counterattacking' in reverse. This shows that market capital is not staying in one sector but circulating. Therefore, it is time to look for investment opportunities in sectors other than large-cap stocks.

Team Leader Hwang Yu-hyun stated that investors do not need to worry about having nowhere to go when holding cash. He emphasized that there are many alternative investment options in the current market, such as power cable stocks, bio, and secondary batteries. As exemplified by LNF's surge today, there are plenty of hidden opportunities throughout the market. Therefore, he advised that it is important to explore investment alternatives in various sectors rather than being tied to specific stocks.

An analysis suggests that large-cap stocks like Samsung Electronics and SK Hynix find it difficult to break through a long-term downtrend all at once. Team Leader Hwang Yu-hyun emphasized that for such stocks to rise, a process of absorbing supply is definitely needed. He explained that Samsung Electronics and SK Hynix are currently in such a supply absorption phase. This implies that a significant rise in large-cap stocks will take time, and a long-term approach is needed rather than being swayed by short-term volatility.

Shareholders holding large-cap stocks like Samsung Electronics and SK Hynix may find the current market situation frustrating. However, Team Leader Hwang Yu-hyun warned that attempting reckless trading on a day like today is dangerous and could lead to buying at the top. He urged investors not to be impatient and to respond cautiously, as the current situation is somewhat unique and difficult. The message for large-cap investors is that a strategy of patience and observing market trends is needed.

Recently, quite a few announcements of new facility investment decisions by semiconductor equipment companies are emerging, and the market is reacting strongly to them. Team Leader Hwang Yu-hyun cited the example of Hansol Iones, which surged 16-18% today, explaining that a stock with a market capitalization of 600-700 billion won, reduced to 320 billion won, still saw a massive surge with heavy trading on a single news item. This suggests that the investment cycle of the semiconductor industry is returning, and related equipment stocks could receive strong momentum.

Following SK Hynix's announcement of investing 54 trillion won in Yeongju, various companies are expected to continue announcing expansion-related news. Team Leader Hwang Yu-hyun analyzed that such expansion news ultimately represents companies making money through investment, which can provide short-term momentum for those companies. This implies that investment expansion will occur across the semiconductor industry, potentially positively impacting the stock prices of related companies.

Team Leader Hwang Yu-hyun advised that when investing, one can anticipate by looking at stocks that first form a 'golden cross' (정배열, direct array), as these stocks have a higher probability of rising. If individual stock selection is difficult, he recommended looking at DS KOSDAQ Active or AI core equipment ETFs. He emphasized that within these ETFs, one should look for stocks where at least the 5-day and 10-day moving averages are in a direct array, and it's crucial to confirm a direct array in an upward trend, not just in a downtrend. This means that trend-following investment increases the probability of success.

Team Leader Hwang Yu-hyun assessed that the significance of this earnings season is not great. While good earnings are desirable, his analysis is that earnings themselves do not significantly impact the market currently. He believes that with stock prices already having fallen considerably, earnings are mostly priced in, making this earnings announcement almost meaningless. Instead, he predicted that future growth drivers, such as who is making new facility investments, will be more important factors in the market. In other words, it is a time to focus on future investment plans rather than past performance.

An analysis suggests that stocks likely to rise in the market are mostly being bought by ETFs. Team Leader Hwang Yu-hyun explained that using ETFs is advantageous for understanding institutional supply and demand, citing the DS KOSDAQ Active ETF as an example. This ETF rose 9% today, much more than the KOSDAQ index, which means the ETF holds many of today's leading stocks. Specifically, the DS KOSDAQ Active ETF is heavily weighted with semiconductor-related stocks, serving as an indicator of institutional concentrated buying in the semiconductor sector.