Taiwan Stock Market Surges Over 2800 Points, Signaling Recovery — Analysts Highlight Key Support and Resistance Levels

The Taiwan stock market (31) rebounded sharply today, rising over 2,900 points intraday to reach a peak of 42,895, decisively breaking through the 5-day moving average resistance at 41,600. It is now testing to stabilize above the 10-day moving average at 42,800. Analysts suggest that in the short term, the market will be assessed on whether it can hold above the 5-day line and successfully challenge resistance near the quarterly line at 44,080.

Uni-Invest Securities Research stated that recent concerns over AI-related spending had driven fundamental sell-offs. However, with major CSP vendors concluding their earnings reports and Taiwanese listed companies completing their financial disclosures, downward revision fears are now subsiding. Additionally, margin lending on the main board decreased by nearly NT$83.2 billion this week, a reduction of over 14.2%, indicating improved supply-demand dynamics. Combined with a strong rally in the U.S. semiconductor index, these factors are creating favorable conditions for the Taiwan market to stabilize and rebound. Uni-Invest recommends closely watching whether the market can successfully reclaim the quarterly line.

However, Uni-Invest also warns that resistance from upper moving averages and a net short futures position exceeding 80,000 contracts suggest investors should avoid excessive leverage.

Cathay Securities Futures Research Department notes that short-term market sentiment remains volatile. If the index fails to stabilize above the 5-day line, the current move should be viewed as a technical rebound. They also point out that foreign investors still hold a net short position of over 80,000 contracts on the Taiwan index futures, and with the Federal Reserve maintaining a cautious stance, they recommend a defensive strategy of gradually building positions on dips until hedging demand clearly subsides.

In terms of stock selection, Cathay Securities suggests prioritizing semiconductor foundry mature process and advanced packaging supply chain stocks with solid earnings news and optimistic management outlooks, while also monitoring silicon photonics stocks benefiting from high-speed transmission opportunities, awaiting further market consolidation.