Seize the Final Opportunity to Position for Major Surge Stocks: Largan, Sunon, Yageo, AU Optronics

I. Market Structure and Technical Analysis

Weighted Index

Today's market showed a 'higher opening, volatile session, and small gain,' closing at 44,850 points (+25 points).

The index remains suppressed below the monthly moving average, indicating a short-term consolidation pattern.

Trading volume was approximately NT$893.6 billion, with insufficient volume remaining the biggest constraint on any rebound.

OTC Index

Opened high but closed lower, ending at 392.11 points (-3.07 points).

The index broke below both the 10-day and monthly moving averages, with weakness in small- and mid-cap stocks becoming evident.

Volume reached NT$189 billion, reflecting low investor appetite for chasing higher prices.

Key Technical Levels

Resistance: 45K–48K (heavy trapped selling pressure)

Support: 40K–42K (strong buying interest)

Short-term range estimate: 42K–46K consolidation

Volume-Price Observation

To reverse the weak trend, volume must expand beyond NT$1.3 trillion.

Otherwise, any rally is merely a rebound, not a trend reversal.

II. Key Factors Influencing Market Trends

International Headwinds

Escalating Middle East tensions → Rising oil prices → Suppressed risk appetite

Energy supply uncertainty increases market volatility.

Market Caution

Ahead of U.S. CSP (cloud giants) earnings reports

Capital has turned conservative, with clear lack of momentum for price chasing.

Positioning Pressure

Dense trapped zones at high levels (above 45K)

Institutional and short-term funds are favoring range-bound trading.

III. Macroeconomic and Liquidity Outlook (Core Mid-to-Long-Term Bullish Case)

Upwardly Revised Economic Growth

Multiple institutions forecast Taiwan's GDP growth to exceed 10%.

Primary driver: AI-driven export and investment boom.

Corporate Earnings Upgrades Continue

Market forecasts for 2025 corporate earnings growth:

Fubon Research: ~51%

Allianz Investment Trust: ~55%

Uni-President Investment Consulting: ~57%

Indicates fundamentals have entered a strong upward cycle.

Strong Liquidity Momentum

M1B YoY growth > M2 → Signaling the start of a liquidity-driven market

Taiwan's excess savings approaching NT$9 trillion

ETF assets continue expanding, bringing in long-term buying demand

Domestic Liquidity Support Structure

National Stabilization Fund / Investment Trusts / ETFs / Repatriated capital

Provides structural downside support

Long-term Index Targets

Medium-term: 50,000 points

Long-term: 55,000 points remain within reach

IV. AI Industry Trends (Core Theme)

Global AI Investment Boom

Amazon / Google / Microsoft / Meta

Plan to invest USD 700 billion (approx. NT$20 trillion)

Full commitment to AI data centers and computing infrastructure

Taiwan's Supply Chain Position

Global core hub for AI hardware

Covers nearly all critical components

V. AI-Beneficiary Industry Groups

Thermal Management and Power

Liquid cooling / Immersion cooling becoming mainstream

Explosive demand for high-wattage power supplies

High-Speed Transmission and CPO

Silicon photonics / CPO / High-speed switches

Key growth engine for 2027–2028

ASIC Custom Chips

CSP in-house chip development trend (reducing reliance on NVIDIA)

Driving NRE and volume orders for Taiwanese manufacturers

Advanced Materials

Strong demand for ABF substrates and CCL

HPC driving material upgrades

Advanced Packaging

Explosive demand for CoWoS / FOPLP

Packaging capacity becomes a key bottleneck

Memory and Power ICs

Simultaneous upgrades in bandwidth and efficiency

VI. Investment Strategy Recommendations

Short-Term Strategy (Range-Bound Market)

Focus on 'range trading'

Principle: Sell high, buy low; focus on spread trading

Avoid chasing rallies; strictly control risk

Mid-Term Positioning Direction

Focus on:

Low base stocks

Stocks with explosive revenue in the second half

Stocks with institutional and major fund inflows

Pullbacks present positioning opportunities

Sector-Specific Strategies

AI mainstream stocks: Position on pullbacks

Weak stocks: Reduce exposure on rallies

Risk Management

Monitor:

Geopolitical risks

Oil price movements

U.S. tech earnings reports

VII. Conclusion

Short-term: Consolidation continues (42K–46K)

Mid-term: AI fundamentals support a bullish bias

Long-term: Dual engines of capital and industry drive upward trend

Key Takeaway:

'Short-term weakness doesn't negate long-term strength. While indices consolidate, individual stocks shine; AI remains the strongest primary uptrend.'

Back Pain Components

Yageo, Walsin, Hosen

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Source: Chen Hsueh-Chin, Analyst, Luen Yuan Investment Consulting

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