Is the Sell-Off Real or Just a Washout? Taiwan Stock Market's Volatile Correction Shows Signs of Hope! These Counter-Trend Rising Indicators Have Reached the Sweet Spot

Taiwan's stock market delivered a rollercoaster performance today, marked by sharp swings as large-cap stocks held firm while smaller stocks faltered. This intense volatility represents a critical cleansing of speculative margin positions, creating a strategic opportunity for capital to rotate into low-base 'sweet spot' sectors. Investors should avoid the dual traps of chasing highs and selling lows, instead focusing on key support levels and phased investment strategies.

Taiwan Market Opens Low, Rallies, Then Closes Lower — Clear Divergence Between Large-Caps and Small/Mid-Caps

Today’s market opened lower, briefly rallied, then closed lower again. Thanks to support from large-cap stocks, the main index ended near flat, but the GreTai Securities Market Index (GTSM) fell 2.26%. As analyst Zhilin noted in his pre-market analysis on the app, U.S. markets have recently rotated between AI semiconductors and defensive traditional sectors, but capital is now concentrating in major tech giants. Taiwan’s market is mirroring this trend. Going forward, key watchpoints include whether the GTSM index can hold the 393-point trendline and whether volume returns during rebounds. A volume-less rally is merely a bounce; only with volume and support holding can a bottom formation be confirmed. The New Taiwan dollar showed resilience around the 32.2 level. Meanwhile, most electronic stocks had already undergone technical corrections, so today’s increased volatility helped flush out yesterday’s rapidly accumulated speculative margin positions. As long as the S&P 500 remains above 7,321 points, the global bullish structure remains intact.

TSMC Earnings Call Takes Center Stage — Capital Returns to AI Sector Leaders

Another major focus today was TSMC’s (2330-TW) earnings call. The market closely watched AI demand, revenue outlook, and capital expenditure plans—not just for TSMC, but as a key barometer for the entire AI semiconductor supply chain in the second half of the year.

In this fast-rotating market environment, our recent strategy has been to focus on industry leaders: Unimicron (3037-TW) for ABF substrates, AcBel (3017-TW) for thermal solutions, Silicon Integrated (3443-TW) for ASICs, and King Yuan Electronics (2449-TW) for semiconductor testing. Today, aside from Unimicron, which saw larger swings due to large-cap volatility, AcBel, Silicon Integrated, and King Yuan Electronics all closed higher against the trend. This shows capital isn’t fleeing AI entirely, but shifting toward core stocks with clearer fundamentals and stronger industry positions.

Download the Free [Analyst Chen Zhilin App] for Real-Time Market Insights and Margin Position Watchlists

Membership for the app’s stock-picking service is limited to a fixed number each month. Subscribers receive a weekly updated 'Margin Position Risk Watchlist.' Download the [Analyst Chen Zhilin App] now via the link below: https://lihi.cc/zwrii

Optical Communications Sector Corrects Again — Avoid Chasing Highs and Selling Lows

The optical communications sector came under pressure again today, affected by the weak GTSM index and targeted by short-term capital rotation. However, recent market trends clearly show that low-base sectors, as long as their industry outlook remains intact, are more likely to regain favor after consolidation. In contrast, once high-flying stocks see their positions loosen, investors who chased highs can quickly find themselves trapped at the top.

With the broader market in a bottoming and range-bound phase, increased volatility is normal. The best strategy is to patiently accumulate quality leaders in positive-growth, low-base industries during pullbacks. In fast-rotating markets, patience is the greatest advantage. Allocate capital to sectors you understand, wait for positions to settle, and for volume-price structures to strengthen—this is the most stable and highest-potential strategy to capture the next leg of the trend. We invite investors to download the [Analyst Chen Zhilin App], where real-time updates are shared instantly. Use data to master the rhythm. Weekly updates to the margin watchlist help you avoid risks and lock in opportunities.

Latest Video (Click title to view on YouTube for better quality)

Sign Up Now to Experience Analyst Chen Zhilin’s Membership Service

Loyal fans, please complete the form to experience weekly curated stock lists, real-time price alerts, and instant strategy updates. Join us in securing your position with the 'Five Wealth Gods.' In volatile markets, rational analysis and data-driven decisions are key. Fill out the form now and follow the professionals: https://lihi.cc/RFzlE

Wealth Hotline: 02-2653-8299. Start your journey toward systematic stock trading today.

Source: Analyst Chen Zhilin / Kaixu Investment Consulting

The securities recommended by our company involve no improper financial interests. Past performance does not guarantee future profits. Investors should make independent judgments, conduct careful evaluations, and assume investment risks on their own.