Foreign Selling Continues, Anticipating a Battle for the 7,000 Line

The September stock market is unlikely to rebound due to several uncertainties. One of the biggest factors is the US Federal Open Market Committee (FOMC)'s interest rate decision, which is likely to keep the market in a wait-and-see stance. Furthermore, the Chuseok holiday period from late September to early October, including market closures, could dampen investor sentiment and reduce trading volume. It is also analyzed that additional buying may be difficult immediately after the holiday, with the US presidential election and fund settlement approaching in early November.

The domestic stock market currently shows firm support at the 6,500 line but faces strong resistance at the 7,000 line. The 6,500 line has provided support multiple times, forming a floor, and its robustness was proven again today by holding above 6,500. However, the 7,000 line, where major moving averages converge, acts as a strong resistance. The market continues to move sideways in this range, making decision-making difficult for investors.

In the current stock market, the supply and demand from foreign investors are acting as a key factor determining market direction. Today, foreigners and institutions each sold 2.4 trillion won, showing large-scale selling pressure. Despite strong buying from individual investors in this situation, the index could not be prevented from falling, which indicates that foreigners hold market leadership.

When customer deposits exceeded 130 trillion won, individual investors led the market, but now they have fallen below 100 trillion won. Customer deposits are standby funds for stock purchases, and this decrease means that funds have left the market or that existing holdings have incurred losses (so-called 'entrapment'), making fund rotation difficult.

Even amidst a difficult market situation with three consecutive days of combined selling by foreign and institutional investors, the 6,500 line has shown robust support. Although there were declines indicated by bearish candles, individual investors' buying contributed to holding the 6,500 line. This suggests that the market has entered a phase of testing a certain bottom, and support is being confirmed in this phase.

The September stock market is expected to battle between the 6,500 and 7,000 lines. Breaking the 7,000 line is always possible, but the important thing is settling above it afterward. It is highly probable that the market will recover the 6,500 line in the current range, and if it firmly settles at 7,000, it can establish a basis for a rise to 8,000 to 9,000. Simply breaking through and maintaining that level are very different concepts, and stable settlement will be an important indicator for future market gains.

In the current market, one must consider the probability of upward, downward, and sideways movements for investments. Especially when factoring in a 10% commission, the probability of the stock price rising as intended by the investor is only about 30%. The remaining 70% falls into areas where the stock price does not move as expected or is uncontrollable, serving as an indicator of market uncertainty.

The current sideways market is likely to continue at least until October. Of course, variables exist that could bring the situation to a close even within September. The most critical variable is whether the Middle East war ends, as an early conclusion could be a catalyst for a stock price rebound.

Secondary battery-related stocks require different response strategies depending on whether they are short-term surge stocks or box-range stocks. For stocks like LNF or Samsung SDI that have shown strong bearish candles for two consecutive days, it's time to consider profit realization. On the other hand, stocks like Gaon Cable, which show surging trading volume and bullish candles in a sideways market, are assessed to have very favorable chart trends. Amidst these differentiated trends, thorough analysis and response for each stock are crucial in a sideways market.

Semiconductor leaders like Samsung Electronics and SK Hynix are currently in a 'quiet movement' state, and there are still opportunities to approach them from a perspective of staggered buying. For Samsung Electronics, 250,000 won, and for SK Hynix, 1,600,000 won are confirmed as key downside support levels. A strategy of staggered buying to incorporate them into a portfolio, after observing market conditions and confirming these support levels hold, is likely to be effective.

Key economic events in September are expected to significantly impact market trends. On September 16, the US Federal Open Market Committee (FOMC) interest rate decision is scheduled, and whether interest rates will be raised is currently difficult to predict. Additionally, the Chuseok holiday and the Gaecheonjeol holiday in early October will lead to increased market volatility before and after the holidays. Investors need to keep these major events in mind and approach them cautiously.

Despite shareholder return policies in the semiconductor market and consecutive buying by other corporations, foreign investors' buying remains sluggish. Foreigners even maintain selling positions on Samsung Electronics and SK Hynix (Samjeonnix). This situation is analyzed as a major reason why foreign capital inflow remains lackluster, even though domestic semiconductor exports are strong.

Foreign investors are cautious about the risk of currency loss, as the dollar value may rise and the won value may weaken if the US raises interest rates. Even if the exchange rate is strong now, dollar strength and won weakness could occur if the US raises rates. This risk of currency loss acts as a factor preventing foreigners from actively investing in the domestic stock market.

In a market with high uncertainty like the current one, holding cash is extremely important, as cash provides investors with various options. Holding cash allows one to seize opportunities for low-price purchases when the market falls, and to selectively invest like shopping when a particular stock looks attractive. In a situation where market trends are difficult to predict, cash is the most powerful weapon to avoid risk and invest at a favorable time. Therefore, the more chaotic the market, the more essential a strategy of flexible response through cash securing becomes.

Maintaining key support prices for major stocks like Samsung Electronics and SK Hynix is crucial. Samsung Electronics' 250,000 won and SK Hynix's 1,600,000 won are primary major support levels, with Samsung Electronics' 230,000 won and SK Hynix's 1,500,000 won acting as additional support below them. If these support levels are breached before settling at 7,000, risk management is necessary.

Analysis suggests the need for differentiated response strategies by sector. Profit realization was recommended for a certain portion of semiconductor materials, parts, and equipment (Sobu-jang) related stocks. Secondary battery-related stocks are expected to take a break for a while, so investors were advised to realize 30% to 50% of their profits on holdings. Conversely, the defense and shipbuilding sectors were presented as interesting sectors for September. These sectors are analyzed to potentially show relatively positive trends in the current market.

Gaon Cable's Bus Duct business segment shows remarkable growth and is expected to be a major growth driver. Bus ducts are high-power copper cables, with sales surging from 80 billion won in 2015 to 800 billion won in 2017. Notably, the profit margin for bus ducts is projected to be around 15%, significantly higher than Gaon Cable's existing operating margin of 2-4%. This substantial improvement in operating profit margin is analyzed to potentially lead to a stock re-rating, similar to cases of defense stocks.

The current market is a difficult, sideways one, where investors need patience and a focus on understanding the intrinsic value of companies. Beyond Samsung Electronics and SK Hynix, efforts are needed to find opportunities in other stocks, requiring continuous observation of companies' sales and operating profit data. Furthermore, in challenging market times, it is wise for investors to combine a flexible profit-taking strategy, securing a portion of profits when they occur.