Best Buying Opportunity Approaching? Taiwan Stocks Lose Quarterly MA—These Two Days This Week Are Crucial

Intel reported a 25% year-on-year revenue increase in Q2, with profits and financial guidance surpassing market expectations. However, its stock dropped 7.8% on Friday, dragging down the broader tech sector. Apple, on the other hand, continued to hit new highs on anticipation of an upcoming foldable iPhone. The four major U.S. indices closed lower for the week, indicating rapid fund rotation from high-valuation tech stocks to traditional and defensive sectors.

Meanwhile, the U.S.-Iran conflict shows no signs of ending, with Trump again threatening to escalate attacks on Iran. This week, crude oil prices briefly broke the $100 per barrel mark, while commodities like soybeans, corn, and wheat also rose, keeping inflation concerns elevated.

On Thursday, the U.S. Federal Reserve (Fed) will hold its interest rate meeting. With rising market expectations for rate hikes, equities may continue to correct. Recently, regardless of earnings quality, major tech giants like Google, Tesla, and Intel have seen their stocks fall post-earnings. Next week, Samsung, SK Hynix, and Microsoft will report earnings, suggesting a high probability of further stock declines.

Nonetheless, the AI-driven industry trend remains unchanged. The medium- to long-term outlook for equities remains bullish, though short-term corrections are likely. Investors are advised to 'buy low, sell high' and purchase quality stocks at attractive valuations.

On Friday, Taiwan's stock market opened higher but closed down 1,195.97 points at 43,654.84, with trading volume around NT$794.2 billion. TSMC (2330-TW) closed at NT$2,350, as large-cap electronics and popular growth stocks corrected in tandem. This downturn was driven by rising U.S. rate hike expectations, continued foreign investor outflows from Taiwan, and high margin debt of NT$577 billion, leading to disorderly market positioning.

Technically, the market has broken below both monthly and quarterly moving averages, with heavy resistance above. The KD indicator has formed a death cross again, and the MACD has fallen below the zero line (the bull-bear boundary), indicating a short-term bearish correction. With oil prices rising due to the U.S.-Iran conflict, even if the Fed doesn't hike rates this Thursday, a hawkish tone signaling future hikes—combined with the same-day Taiwan Futures (TAIFEX) settlement—could amplify market volatility and trigger a sharp correction. A significant drop in Taiwan stocks on Thursday or Friday could present an excellent long-term buying opportunity.

In terms of individual stocks, next week's focus remains on tech giants' earnings and AI capital expenditures. If Microsoft, Meta, and Amazon continue expanding data center investments, AI server and cooling supply chain stocks such as Foxconn (2317-TW), Quanta (2382-TW), Wistron (3231-TW), Wiwynn (6669-TW), Advantech (3017-TW), and Calesta (3324-TW) warrant attention. SK Hynix's earnings will impact HBM and memory-related stocks, including Nanya (2408-TW), Winbond (2344-TW), Phison (8299-TW), ADATA (3260-TW), and Innodisk (5289-TW). Advanced process and packaging firms like TSMC (2330), ASE Holding (3711), King Yuan Electronics (2449-TW), Wafer Works (6223-TW), and ChipMOS (6515-TW) also remain relevant. However, the key now is not who buys first, but to wait for volume contraction, stabilization, and a return above short-term moving averages before gradually building positions. Holding cash is not bearish—it's preparation for the next truly safe buying opportunity.