Index pullback ≠ end of trend | SanDisk at 1,500; Micron entry zone analysis for the 915–880 range

I believe the market index pullback yesterday was driven primarily by two factors: first, ongoing uncertainty in the Middle East, and second, the persistence of high yields on US 10-year and 30-year Treasury bonds. It is crucial to understand the logic here: the bond and equity markets are closely linked, like twins. For high-growth tech stocks in particular, higher US Treasury yields create greater valuation pressure. When risk-free rates remain elevated for an extended period, capital naturally reassesses whether it is still justified to pay such high valuations for these high-growth tech names. Once investors begin to view short-term valuations as stretched, it easily triggers concentrated profit-taking.

Let's first look at memory chips.

Although the entire memory sector also corrected yesterday, its decline was notably smaller than that of some core optical module stocks, demonstrating greater resilience. In terms of industry certainty—whether looking at locked-in long-term agreements for the coming years or current spot price trends—the memory industry's prosperity remains clear. Therefore, yesterday's drop has not changed my mid-term outlook for the memory sector. The only thing to do now is wait for a better entry price. Since the market is willingly pushing prices down for us, there is no need to rush into chasing highs.

1. $SanDisk (SNDK.US)$ Let's look at SanDisk again, which currently exhibits the highest elasticity. If the market continues to correct, I recommend focusing on the area around $1,500. Compared to the $1,800 level seen a few days ago, the risk-reward ratio is now much more favorable. For those who completely missed the earlier rally in SanDisk, there is no need to rush. You can patiently wait for the stock to pull back to around $1,500 and consider initiating a small position as your first entry.

2 $Micron Technology (MU.US)$ Regarding Micron, from a technical structure perspective, $915 remains a significant medium-term support level. If you already entered at $940 yesterday, there is no need to add to your position immediately upon seeing slight price adjustments, as your initial cost basis is already relatively low. You can afford to be patient; if the market continues to correct, wait for a deeper pullback before making a second entry. However, for those who did not participate in Micron yesterday, the $915–$880 range presents a good opportunity for initiating a first tranche of positions.

Turning to optical modules, which saw larger corrections yesterday, the declines in several core names were significantly sharper than those in the memory sector. However, we must view this objectively: optical modules fell more largely because they had risen more previously. Since August, optical modules have been the strongest theme in the tech sector, with many core stocks posting exaggerated gains in just half a month. Consequently, when risk-off sentiment emerges, the sectors with the largest prior gains naturally become the primary targets for profit-taking. While I do not believe a single day of correction signals the end of the industry trend for optical modules, short-term trading should avoid the blind chase for highs seen in early August. The more important strategy now is to wait for core stocks to return to their true strong support zones.

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