Which stocks will bounce back first after margin calls?

The Taiwan stock market has pulled out a lower shadow line after a sharp decline, but the overall rebound is insufficient. TSMC is playing a supporting role in the market, but the overall rebound is insufficient. Some individual stocks have seen low buying pressure enter the market, but many high-margin stocks continue to limit down, indicating that deleveraging and margin call selling pressure have not been fully released. The short-term focus is not only on whether the index can defend the support area of 40,000 to 41,500 points, but also on whether the downtrend is accompanied by sufficient trading volume. If the volume shrinks and pulls out a lower shadow line, it may only represent a temporary easing of selling pressure; if panic volume is fully vented and margin funds are quickly washed out, there is a chance to form a more reliable stop-loss signal.

Recently, semiconductor stocks have seen significant corrections. The market attributes part of the reason to the rise of China's next-generation AI models, fearing that low-cost models will weaken demand for GPUs, memory, and data center investments. However, from actual operations, after the rapid increase in model usage, it is easier to face insufficient computing power, highlighting that AI applications continue to expand and cannot do without GPUs, HBM, and data center hardware. In other words, new model competition does not necessarily mean the disappearance of semiconductor demand, but rather may accelerate the global computing power race. What really needs to be noted is whether AI capital expenditure will slow down due to financial pressure from major players, and whether the subsequent financial reports, profits, and capital expenditure outlook of large technology companies can continue to support market confidence.

From the perspective of funds, the most important indicator for the Taiwan stock market is still the margin balance and the overall margin maintenance rate. In past systemic risks, when the margin maintenance rate drops to around 140%, it often means that floating shares and leverage have been significantly washed out, and the market gradually enters the stage of stopping the decline and rebounding. The common sequence in the market is that margin calls first come to an end, the index shows a technical rebound, and then foreign capital re-enters, and the Taiwan dollar also has the opportunity to stop depreciating. If foreign futures short positions decline simultaneously, the rebound time and space can be expected to expand; if the short positions remain high, even if the spot is replenished, the rebound may be short-lived. Therefore, in addition to the financial reports of technology giants, attention must also be paid to the situation in the Middle East, changes in oil prices, and the policy signals released by the Federal Reserve at the end of the month.

The key at this stage is not to rush to guess the lowest point, but to identify the strength and weakness of stocks and do a good job of upgrading holdings. High P/E, high margin, and stocks with excessive gains in the previous period, when the growth rate cannot support the valuation, the rebound may instead become an adjustment opportunity; in contrast, TSMC, semiconductor equipment, AI servers, and cooling, which have substantial demand and profit support, if they can show a lower shadow line and relative resistance to declines in a sharp decline, are worth including in subsequent observations. The memory industry will continue to benefit from the structural demand driven by AI in the long term, but the buying point still needs to wait for the settlement of the head-cutting selling pressure. Investors should reduce leverage, retain cash, and use the rebound to eliminate the weak and retain the strong, rather than cutting stocks in panic or determining that the market has fully turned bullish after a single rebound.

Recently, the Taiwan stock market has been quite volatile, and many friends may feel a bit uneasy in their hearts. But this is more like a consolidation of positions after a rise, not the end of the market. What is more important now is to review the stocks in hand and eliminate the weak and retain the strong. I have read 100 foreign reports, made several nights of phone calls, and based on my insider information, I have carefully prepared the "TSMC Five Tigers" for everyone. These five stocks all have the opportunity to soar in the next wave. But when to enter? The purchase price is a member's privilege. If you want to follow my operation rhythm directly, you can also follow me to layout at the low point and enjoy the rising dividends. Join my membership, and I will help you eliminate the weak and retain the strong, and switch to stocks with more opportunities, following the next mainstream.

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