Caution against chasing SooBuJang surge

The main drivers of this surge were the parts, materials, and equipment (SooBuJang) and secondary battery sectors. In contrast, the pharmaceutical and bio sector had a relatively low contribution to the index's rise.

It is necessary to observe whether clear buying entities emerge through news of orders or solid-state battery momentum, and to watch for the possibility of a simultaneous rise in semiconductors and secondary batteries.

It is important to confirm whether semiconductors transition to an uptrend around Samsung Electronics' preliminary earnings announcement.

If a trend of both semiconductors and KOSDAQ rising together is confirmed, a strategy of significantly increasing KOSDAQ weighting can be considered. This is based on past experience where KOSDAQ also fell when semiconductors declined.

The artificial intelligence (AI) momentum is forming a rotation, moving from power equipment to memory semiconductors, CPUs, and chips.

The SooBuJang sector benefits broadly from this AI rotation, with related stocks included in each stage across two or three categories of items.

While the tech-driven rally continues, the pharmaceutical and bio sector remains alienated from this trend.

This reflects the market's attention being concentrated on specific technology sectors like AI and semiconductors.

At this point, reducing Samsung Electronics' weighting and chasing SooBuJang could be aggressive buying. As the two sectors are in different positions, excessive shifts in weighting should be avoided.

If Samsung Electronics and Hynix prices fall, SooBuJang stocks could decline even more sharply. Therefore, rather than significantly increasing SooBuJang weighting now, a strategy of maintaining existing weighting and rolling is needed.

Dealing primarily with stocks at the end of convergence is advantageous from a trading perspective, and indiscriminate expansion of weighting could increase risk.

With Hynix's rise, post-process SooBuJang stocks surged, and earlier this year, pre-process stocks also rose significantly with Samsung Electronics, leading to low price attractiveness for the SooBuJang sector currently.

Furthermore, there is concern about reduced corporate margins due to surging raw material prices, increasing the likelihood of a recurrence of the earnings shock seen in some stocks during the first half's earnings announcements.

These factors suggest that a cautious approach to the SooBuJang sector is necessary at present.

Therefore, rather than expecting a repeat of past surges, a close analysis of earnings and raw material price trends is required.

It is rational to set target stock prices as a 'zone' rather than a single line.

It is recommended to manage risk by selling approximately 30% of your holdings in segments within the high-price zone and re-entering a portion when the stock price falls. Approaching this 30% with the mindset of 'letting it go' can make it more comfortable psychologically for investors.

While AI momentum remains a key market driver, it is advisable to prioritize sectors that are fundamental to the semiconductor industry.

However, the extent of AI momentum's spread is assessed to be somewhat lower compared to the first half of the year.

Judging by derivative market movements, there is an expectation of strong tendencies to induce upward settlement rather than downward.

Given that KOSPI has underperformed KOSDAQ, there's a possibility of a rise to balance the indices. While concerns about a decline due to holiday caution exist, from a profit perspective, an upward structure is deemed favorable.

Increased caution ahead of the holidays can be a source of anxiety for individual investors.

The recent decline in Samsung Electronics and Hynix appears excessive compared to the US semiconductor market situation, and foreign investors might exploit the options expiration's caution to sway the market.

Currently, call option prices are very low, while put option prices are relatively high.

From the perspective of foreign investors, call option returns are overwhelmingly higher than put option returns. Therefore, a fund managing specific assets may push the market up to maximize profits.

If the market needs to be moved to maximize option profits, a strategy of boosting call options is analyzed to be more effective.

Due to the index adjustment before the holidays, Samsung Electronics and call option prices are undervalued.

If Samsung Electronics' earnings announcement is not poor, there is a possibility of an index rebound, and with call option premiums significantly reduced, both Samsung Electronics stock and call options can be considered inexpensive.

Upside betting can yield index-linked profits, and a decisive strategy considering option premiums may be effective.

US Micron Technology reached near its previous high, recording high returns, but Korean SooBuJang, despite its sharp rise, has lower returns than Micron. Conversely, the Korean market shows a contrasting pattern to the US, with large-cap semiconductor stocks adjusting while SooBuJang rises.

Past data suggests that such a misalignment is likely to be corrected eventually through a rise in large-cap stocks.

Such a shock could erode all momentum in the short term.

However, it is judged that such risks will not fundamentally alter the market's fundamentals. A short-term sharp decline could be an opportunity from a long-term perspective, but it may be difficult for individual investors to withstand it.

Specifically, confirming whether cyclical consumer goods rebound in October and if infrastructure-related stocks spread beyond the power sector is crucial for devising corresponding strategies in the Korean market.