Margin Maintenance Rate Hits Bottom? The 'Perfect Buying Opportunity' After Large-Scale Deleveraging, Google Earnings Week to Spark Next Surge!

Taiwan's stock market continues its rebound pattern following deleveraging, with margin maintenance rates rising from their lows. Quantitative data shows the broader market still has room for recovery. As major tech companies enter earnings season, which themes will take the lead in the third quarter's range-bound consolidation?

〈Rebound Continues After Deleveraging – Resistance from Moving Averages Doesn't Change Recovery Trend〉

Today, Taiwan's stock market extended its post-deleveraging rebound. Morning trading volume briefly approached TWD 1.1 trillion before moderating. The market closed up 592 points at 44,825, with total turnover reaching TWD 982.6 billion. Although TSMC (2330-TW) turned negative during the session, heavyweight stocks such as Hon Hai (2317-TW) and MediaTek (2454-TW) stepped in to support the market, maintaining a strong consolidation. Both the weighted index and the over-the-counter index encountered resistance from key moving averages during their upward moves, leaving upper shadows on their candles. This price action fully aligns with the rebound path previously forecasted by Professor Chen Chih-lin. Short-term volatility is inevitable. Investors who fail to understand the market structure may end up selling low during panic and then chasing high after rebounds, repeatedly falling into a destructive cycle.

〈Margin Maintenance Rate Returns to Neutral – Mastering Range-Bound Trading in Q3〉

Looking back at the deleveraging triggered by the unwinding of yen carry trades in 2024, the market's margin maintenance rate had dropped as low as approximately 139%. As positions settled, it subsequently recovered to 167%. In the current market correction, the margin maintenance rate bottomed out at 143%. With the index rebounding and margin balances slightly increasing, the rate has now returned to around 150%—a neutral level. Quantitative analysis suggests the market still has room for further recovery.

Professor Chen has consistently reminded investors through his programs and app that during market panic, blind selling should be avoided. The goal is to seize the strategic window created after margin positions are cleaned out. The third quarter is likely to remain in a range-bound consolidation phase. If the margin maintenance rate rises too quickly, investors should follow the pre-planned strategy of selling high and buying low to manage positions—rather than rushing to sell after low-level cleaning is complete.

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The app's stock-picking membership accepts only a limited number of subscribers each month. Weekly updates include the latest 'Margin Position Risk Watchlist.' Click the link to download the [Chen Chih-lin Analyst APP]: https://lihi.cc/zwrii

〈Industry Trends Repricing – Earnings Season Tests Sector Strength〉

The industry logic analyzed in recent days has once again been validated by the market. As long as long-term trends remain intact, once positions are cleaned out, stock valuations can rebound rapidly. Unimicron (3037-TW), the leader in ABF substrate, followed yesterday's limit-up with another today, achieving a short-term recovery of nearly 20%. Kington Technology (6442-TW), a key player in optical communications, previously saw its margin maintenance rate drop to extremely low levels. After completing position cleaning, it surged to the daily limit this morning. Creative Electronics (3443-TW), a key ASIC stock, also continued its valuation recovery.

Market focus now shifts to Google's earnings report. Investors will closely watch guidance on data centers, AI infrastructure, AI agents, and CPU usage and specification upgrades—key indicators affecting the valuation of optical communications and ASIC sectors. Investors should not chase stocks just because they hit limits, nor panic during volatility. Instead, they must closely monitor forward-looking industry data released during earnings season, using data and logic to identify leading themes and discipline to control timing. We invite investors to download the [Chen Chih-lin Analyst APP], where real-time insights are shared immediately. Use data to master market rhythm, and benefit from weekly updates to the margin risk watchlist to avoid risks and lock in opportunities.

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Source: Chen Chih-lin Analyst / Kai-Hsu Investment Consulting

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