【Last Chance to Escape?】Taiwan Stock Market Plunges 2,953 Points! Will It Fall Further If No Rebound by Wednesday?

Despite TSMC's outstanding earnings call, chip-related stocks failed to rally. The Philadelphia Semiconductor Index (SOX) dropped another 1.63%, officially entering a technical bear market after falling over 20% from its peak. Market concerns over excessive AI capital spending, competition from China's open-source AI models, Netflix's weak earnings guidance, and rising oil prices due to U.S.-Iran tensions have led to sustained capital outflows from high-valuation tech stocks, causing all four major U.S. indices to decline. The current core issue in the U.S. market remains shareholding and valuation corrections, not yet a broad deterioration in corporate fundamentals.

Technically, the Nasdaq and SOX still face downward pressure, while the S&P 500 has broken below its short-term moving average. Next Thursday, Google and Intel will report earnings, which could be pivotal in determining the short-term direction of AI-related stocks.

On Friday, Taiwan's stock market plunged 2,953 points to close at 42,671, marking the largest single-day point drop in history and breaking below the quarterly moving average of approximately 43,525. TSMC fell NT$180 to NT$2,290, dragging the broader market down by about 1,430 points alone. UMC, Walsin Lihwa, and Nanya Technology all hit their daily trading limits on the downside.

This decline wasn't due to poor performance from TSMC's earnings call, but rather a synchronized global deleveraging in semiconductor stocks, with large-cap and popular AI stocks both facing stop-loss selling pressure. However, technically, the first break below the quarterly line typically sees a strong rebound within three days. Historically, record-breaking drops are often followed by higher rebound probabilities. Therefore, if the market fails to reclaim the quarterly line by next Wednesday, a new wave of correction may emerge. It is advised to retain 30–50% in cash and reduce leverage—preserving capital is more important than rushing to catch a falling knife.

For individual stocks, two directions are worth watching next week. First, beneficiaries of rising oil prices and geopolitical tensions, including Formosa Petrochemical (6505-TW), Formosa Plastics (1301-TW), Nan Ya Plastics (1303-TW), China Petroleum & Chemical (1314-TW), and shipping firms Evergreen (2603-TW) and Yang Ming (2609-TW). U.S.-Iran tensions escalated, with Brent crude surging over 4% in a single day, making energy stocks one of the few sectors to rise逆势 in U.S. markets.

Second, AI supply chain stocks that were oversold but whose fundamentals remain intact, such as TSMC (2330-TW), Tripod Technology (2383-TW), Acbel Polytech (3017-TW), Twinhead International (3324-TW), Win Semiconductors (6223-TW), and Inspiretec (6515-TW). However, entry should only occur after prices stabilize, volume contracts, or stocks reclaim their short-term moving averages.

Now is not the time to race to buy, but to protect capital. Holding cash isn't bearish—it's a strategic move to wait for safer, higher reward-to-risk entry points.

➤ Ding Ji Trader He Ji-Ding LINE Fan Page

https://lin.ee/iuxMCJU

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