--- title: "South Korean Stock Market Soars 22%, Yet Almost \"No One Holds Positions\"" type: "News" locale: "en" url: "https://longbridge.com/en/news/295819007.md" description: "The South Korean KOSPI Index surged 10% in three trading sessions, rebounding over 22% from its lows and officially confirming a technical bull market. However, hedge funds have significantly reduced their positions, creating a severe divergence from the index's gains. Analysts point out that if the market continues to rise, passive position-building could become the driving force for the next phase of the rally" datetime: "2026-08-13T15:14:17.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295819007.md) - [en](https://longbridge.com/en/news/295819007.md) - [zh-HK](https://longbridge.com/zh-HK/news/295819007.md) --- # South Korean Stock Market Soars 22%, Yet Almost "No One Holds Positions" Driven by both technical factors and capital flows, the South Korean stock market has completed a rare and rapid rebound. However, hedge funds were notably absent from this rally, planting the seeds for potential further upside driven by FOMO (fear of missing out). The KOSPI Index rose approximately 10% in just three trading sessions, accumulating a rebound of over 22% from its low on July 30, thereby officially entering technical bull market territory. This marks the first time the index has reached this threshold since its historic plunge in July. Meanwhile, volatility has nearly halved, foreign investors and local institutions continue to net buy, and market sentiment has clearly stabilized. **However, hedge funds have currently significantly reduced their KOSPI positions, creating a significant divergence between current holding levels and the index's gains. Analysts point out that passive position-building could become the driving force for the next phase of the rally.** ## **Technical Confirmation of Rebound, Sharp Decline in Volatility** The KOSPI has firmly established itself above the downward trendline that previously suppressed its movement and has reclaimed the 21-day moving average. From a technical structure perspective, the current rebound has received preliminary confirmation, but a greater test follows immediately—the 100-day moving average constitutes the next important resistance level. Changes in volatility are also worth noting. The KOSPI VIX has nearly halved from its peak, although it remains in a relatively high range when viewed from a longer-term perspective. Notably, while the index has recorded its largest rebound since the plunge, volatility has dropped in tandem. This stands in stark contrast to the extreme pattern of "rising prices accompanied by soaring volatility" seen during the previous phase of irrational exuberance, indicating that current market sentiment is more robust rather than irrationally euphoric. ## **Foreign Investors and Institutions Enter the Market, Retail Investors Take Profits** In terms of capital flows, foreign investors were the primary buyers in this round of rebounds. According to Goldman Sachs sales desk data, net buying of the KOSPI by foreign investors has currently reached approximately $1.2 billion, with about $1.1 billion concentrated in the technology sector, meaning overall buying was almost entirely driven by tech stocks. Local institutions also stood on the buy side, with net buying of the KOSPI amounting to approximately $383 million, and net buying in the technology sector reaching about $432 million. In contrast, retail investors continued to take profits, with net selling in the technology sector alone reaching approximately $1.5 billion. Risk appetite in the semiconductor memory sector remains strong. The Philadelphia Semiconductor Index rose 2.5% overnight, coupled with continued optimistic expectations regarding shareholder returns from Samsung Electronics and SK Hynix, providing important support for sentiment. ## **Hedge Funds Absent from Rebound, Pressure to Cover Positions Accumulates** The most striking structural feature of this rebound is the widespread absence of hedge funds. Hedge funds have significantly reset their KOSPI positions, and the gap between current holdings and the index's performance continues to widen. In other words, the index has already completed a substantial repair, but the positions of major institutional investors have failed to keep pace. Once this positioning vacuum encounters pressure from further index rises, it may trigger forced re-positioning, forming a self-reinforcing upward spiral. Furthermore, the Philadelphia Semiconductor Index maintains a clear lead relative to the KOSPI. If the KOSPI begins to close this relative gap, it will provide additional pressure for investors with underweight positions to cover. ## **Can Samsung and SK Hynix Ignite a Short Squeeze in Memory Stocks?** At the individual stock level, SK Hynix has broken through its downward trendline, becoming the most actively bought target by foreign investors in a single day, although its share price remains below the 21-day moving average. Analysts believe that triggering a true short squeeze requires seeing larger trading volumes and a decisive breakthrough of the share price above the 21-day moving average. Samsung Electronics has clearly moved above the short-term downward trendline formed since its historical highs and has reclaimed the 21-day moving average, but the 50-day moving average constitutes the current most important resistance level, which still awaits a breakthrough. Overall, if Samsung and SK Hynix can effectively break through their respective resistance levels and maintain continuous net inflows from foreign investors, the current rebound could evolve into a systemic short squeeze in memory stocks against the backdrop of underpositioning, dragging hedge funds into a situation of forced chasing of rising prices. For investors still looking to position for upside potential, the EWY call option spread strategy offers a relatively more attractive risk-reward ratio at current levels compared to naked long call options. ### Related Stocks - [03121.HK](https://longbridge.com/en/quote/03121.HK.md) - [EWY.US](https://longbridge.com/en/quote/EWY.US.md) - [SSNGY.US](https://longbridge.com/en/quote/SSNGY.US.md) - [SMSN.UK](https://longbridge.com/en/quote/SMSN.UK.md) ## Related News & Research - [Korea's 22% Rally Has A Problem: Nobody Owns It](https://longbridge.com/en/news/295800537.md) - [SK: Record profit and revenue growth driven by semiconductors and AI, with major asset divestment](https://longbridge.com/en/news/295896541.md) - [Samsung Fire & Marine Insurance: Record H1 2026 profits, S&P AA upgrade, and AI-driven innovation fuel future growth](https://longbridge.com/en/news/295847615.md) - [South Korea's SK Shipping to become Asia's largest LNG carrier operator in H-Line asset swap](https://longbridge.com/en/news/295721828.md) - [TerraPower selects Hyundai E&C as EPC contractor for up to eight Natrium reactors](https://longbridge.com/en/news/295934070.md)