Foreign investors sold KRW 1.7 trillion worth of KOSPI stocks, but the KOSDAQ rose 3%. Should I switch to KOSDAQ materials, parts and equipment stocks before Samsung Electronics' earnings tomorrow?
2026-10-07
Two markets moving in opposite directions on the same day
On 10/6, foreign investors sold about KRW 1.75 trillion on the KOSPI but bought KRW 109.4 billion on the KOSDAQ. Institutions also net bought KRW 97.9 billion on the KOSDAQ, while individuals sold KRW 207.3 billion (Businesskorea, 2026-10-06). Brokerages saw this as "rotation of money that had piled into semiconductors moving into batteries and small component stocks." In other words, money changed places rather than fundamentals suddenly improving.
Note that this move came two days before Samsung Electronics' earnings release. Whether foreigners sold large caps because "semiconductors are done" or to "reduce risk before earnings are confirmed" makes all the difference to how long the KOSDAQ rally lasts.
Tomorrow's Samsung Electronics earnings are the fork in the road
The brokerage consensus is KRW 108.1 trillion per FnGuide, and KB Securities expects KRW 110 trillion (Global Economic, 2026-10-06). But this number has already been cut sharply. As the won-dollar rate fell from the 1,500 won range in Q2 to the 1,300 won range in September, Kiwoom Securities lowered its estimate from KRW 122 trillion to 107 trillion, Hana Securities from 119 trillion to 108 trillion, and Samsung Securities from 113 trillion to 105 trillion (Herald Economy, 2026-10). With the bar lowered, there is room for a "better than expected" reaction.
The variable lies outside semiconductors. The smartphone and home appliance (DX) division is forecast to swing from a KRW 8 billion loss in Q2 to a loss of up to KRW 2 trillion in Q3. It is a structure in which "chipflation," with memory prices rising faster than product prices, eats into the company's own device business (Global Economic, 2026-10-06).
Action plan by outcome
| Outcome | Expected foreign behavior | KOSDAQ MPE stocks | Response |
|---|---|---|---|
| KRW 108 trillion or more + shareholder-return message | Renewed buying of large-cap chips | Short-term profit-taking pressure | Restore large-cap weight, stop chasing MPE stocks |
| In line at KRW 105-108 trillion | Wait and see, selling slows | Rotation continues | Keep existing weights, buy MPE stocks only on dips |
| Below KRW 105 trillion or shock from wider DX losses | Selling continues | Risk of falling together | Cut MPE weight as well |
The last row is the key. As CEO Lee Ji-hwan of Sampro TV pointed out, MPE stocks need Samsung Electronics and SK hynix prices to stay alive in order to rise. If large caps collapse, MPE stocks fall even harder. The same program also noted that "unless you hold MPE stocks for six months, it's all trading." This points in the same direction as CEO Lee Sun-yeop's warning that "MPE stocks come down first when oversupply arrives."
Korea ETF signal status
EWY (the US-listed Korea ETF) has met its entry conditions since 10/2. The past five days are shown below.
| Date | Close | MA10 | MA50 | MA150 | Entry | Trail buffer | From high |
|---|---|---|---|---|---|---|---|
| 9/29 | 187.10 | 184.71 | 175.78 | 168.79 | No | 4.70% | -15.30% |
| 9/30 | 182.78 | 185.43 | 175.98 | 169.02 | No | 2.75% | -17.25% |
| 10/1 | 186.11 | 185.80 | 176.29 | 169.25 | No | 4.25% | -15.75% |
| 10/2 | 191.88 | 186.86 | 176.65 | 169.52 | Yes | 6.87% | -13.13% |
| 10/5 | 191.46 | 187.09 | 177.22 | 169.82 | Yes | 6.68% | -13.32% |
In the US session on 10/6, EWY fell to $186.40 (-2.64%). A simple calculation based on the 10/5 trail buffer of 6.68% puts the stop at about $178.7, and at $186.40 the buffer has narrowed to a little over 4%. The signal debate also concluded "the semiconductor earnings cycle is intact, but with Samsung's earnings and the FOMC clustered together, enter at only 50% of normal size" (REDUCE).
What should investors do
- Don't buy anything new today. Tomorrow's earnings and the Hangul Day holiday the day after overlap, so the reaction will be concentrated in a single day. It's not too late to act after seeing the results.
- Keep weights at about 7 for large-cap chips and 3 for MPE stocks. With the KOSDAQ up about 8% in a week, switching to MPE stocks now is likely to be chasing.
- Check whether the battery surge is short covering. Whether the roughly 10% one-day gains in POSCO Future M and EcoPro BM reflect real demand will become clear in Q3 results in late October. Until then, buy only in tranches.
- EWY holders should remember the stop near $178. If an earnings shock hits, a 4% buffer could be wiped out in a day.
Detailed charts and signals for other tickers are available on the /signals dashboard.