Buy Oversold, Pick Bargains: Walsin, Winbond, and Sotech

1. Market Structure and Key Highlights

The Taiwan stock market showed a 'gap-up, volatile, and closed higher' pattern.

It surged nearly 1,090 points intraday and closed up 592 points.

Trading volume reached approximately NT$983.9 billion—higher than the previous day but still below the quarterly average of NT$1.25 trillion, indicating insufficient momentum.

The OTC index also rose, closing up 13.22 points (+3.46%) on a volume of NT$188.8 billion (also below its quarterly average).

This movement is classified as a 'technical rebound after panic selling.'

2. Key Reasons for the Rebound (Capital + Sentiment + External Catalysts)

Improved Positioning

Margin debt dropped for two consecutive days by over NT$68.5 billion—indicating deleveraging is complete.

Foreign net short positions in futures fell below 80,000 contracts—reducing downward pressure.

Global Market Influence

U.S. chip stocks surged (SOX +5.2%).

Micron and SK Hynix ADRs rose over 12%.

Korean stocks also rebounded—indicating stabilization across Asian markets.

Market Sentiment Recovery

Previous panic-driven stop-loss selling pressure has been released.

Bearish momentum has weakened—triggering a retaliatory rebound.

3. Key Technical Observations

Weighted Index:

Back above the 10-day moving average ✔

Still below the monthly moving average ✘

OTC Index:

Remains below both 10-day and monthly moving averages—indicating a weak consolidation.

Upper Resistance:

46,000–47,000 points is a heavily trapped zone—strong short-term resistance.

Lower Support:

40,000–42,000 points provide strong defense.

Conclusion:

Short-term rebound continues, but likely to face resistance and volatility.

Strategy: Do not chase gains; pullbacks present opportunities.

4. Historical Statistical Edge (Key Confidence Indicator)

After a single-day drop ≥1,500 points:

5 days: +4.88%

10 days: +4.87%

20 days: +7.9%

30 days: +13.3%

40 days: +18.6%

Probability of gain: Over 90%

One-month win rate: Nearly 100%

Implication:

Medium- to short-term rebound is almost certain.

Pullbacks = opportunity, not risk.

5. Fundamentals and Macroeconomics (Long-Term Bullish Core)

Economic Growth Surge

Three major think tanks unanimously upgraded GDP forecasts—potentially exceeding 10%.

Exports and AI demand are the main growth drivers.

Corporate earnings continue to be revised upward

Analyst-estimated annual growth rates:

Fubon Securities: 51%

Allianz Global Investors: 55%

Uni-President Investment: 57%

Strong capital momentum

M1B > M2—indicating the start of a liquidity-driven market

Taiwan’s excess savings could reach NT$9 trillion

ETF inflows continue

Conclusion:

Taiwan stocks are in a 'dual bull market' of fundamentals and liquidity.

6. Medium- to Long-Term Trend Outlook

AI industry as the primary growth engine

Technology evolution:

Generative AI → Agentic AI

Driving comprehensive demand upgrades:

Compute, transmission, power consumption, integration

Taiwan’s advantages:

Complete supply chain (wafer → packaging → materials → systems)

Globally irreplaceable position

Index outlook:

50,000 points → medium-term target

55,000 points → long-term achievable

7. Industry Focus (Capital Allocation Directions)

Core AI Supply Chain

Advanced process (3nm / N2 / A16)

CoWoS / advanced packaging

ASIC / IP design

Key growth sectors

ABF substrates (supply gap could reach 51% by 2028)

CPO / silicon photonics (solving high-speed transmission bottlenecks)

AI servers (CSP capex explosion)

Thermal solutions / power / PCB

Catch-up and cyclical sectors

Passive components (upgraded AI specs drive demand)

Memory (DDR4 shortage)

Industrial PCs / equipment stocks

8. Trading Strategy Recommendations (Key Points)

Short-Term Strategy

When rebound approaches 46K+:

Reduce positions / avoid chasing prices

On pullbacks:

Gradually accumulate on dips

Stock Selection Criteria

Prioritize:

Low base + earnings turnaround + institutional interest

Avoid:

High technical resistance (quarterly line / neckline)

Trading Principles

'Buy on dips, don’t chase highs'

'Sell high, buy low for spread'

Strictly control capital and risk

9. One-Sentence Summary

The Taiwan stock market has entered a phase of 'short-term volatile rebound + medium- to long-term AI-driven bull market.' Pullbacks are opportunities—stock selection outweighs market timing.

After panic-driven selloffs,

a major counterattack is brewing.

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Source: Luen Yuan Investment Consultant, Analyst Chen Xuejin

The individual securities recommended by our company have no improper financial interests. Past performance does not guarantee future profits. Investors should make independent judgments, carefully evaluate, and bear their own investment risks.