Will the Rebound Collapse Again? 4 Key Levels for Taiwan Stocks in August Revealed

Last Friday, Taiwan's stock market recorded its largest single-day gain in history, only to plunge nearly 1,000 points in overnight trading. Many investors are once again asking: "Is another market crash imminent?" If fear dominates your mindset, you may miss this crucial opportunity for market reshuffling and capital reallocation.

For August, the first key indicator to watch is the U.S. 10-year Treasury yield.

The yield represents the global cost of capital. When yields continue to rise, capital tends to flow from equities to bonds, suppressing stock valuations. Conversely, if yields begin to fall, market risk appetite often improves, and technology stocks and AI-related sectors are more likely to regain investor favor.

Two Key Observations for August

1. Decline in U.S. Treasury Yields

If the 10-year U.S. Treasury yield falls below 4.55%, it signals easing market pressure and a potential improvement in risk appetite.

2. Stabilization and Rebound of the New Taiwan Dollar

If the New Taiwan dollar reverses its depreciation and strengthens, it indicates reduced pressure from foreign capital outflows and increases the likelihood of foreign funds returning to Taiwan's stock market. This would positively benefit large-cap stocks and AI-related sectors.

Four Most Important Watch Points for August

1. 41,610 Points: The First Line of Defense

As long as this level holds, even if short-term volatility increases, the overall bullish structure remains intact. Pullbacks can still be viewed as opportunities to gradually build positions.

2. 41,155 Points: Gap Support Level

A break below this level suggests a prolonged consolidation period. Investors should adopt a more conservative approach and wait for new stabilization signals.

3. 40,000 Points: Critical Weekly Support During 'Triple-Low Subtraction'

Starting in August, the weekly chart enters a 'triple-low subtraction' phase. If the 40,000-point level can be maintained for several weeks, medium-term technical support will strengthen, helping to restore market confidence.

4. 43,000 Points: Key Threshold for Bullish Resurgence

If the market successfully holds above 43,000 points, it indicates that the medium-term bulls have regained control. The weekly chart could turn bullish again, and market sentiment is likely to improve further.

August Investment Strategy: Forget the V-Shaped Rebound, Adopt the '33 Strategy'

Given this outlook, investors should not expect an immediate V-shaped recovery in August. Instead, profits should be accumulated in stages. I recommend the '33 Strategy': aim for a 30% gain in each phase, and after three successful phases, your assets could nearly double. Below is our recommended list of fundamentally strong stocks to track:

Favored by Foreign Investors:

Raycom (6207-TW): Benefits from recovering demand for passive components, with stable earnings performance.

Sin Sheng Li (4931-TW): Possesses a unique niche in energy storage systems and power battery modules, with clear long-term growth prospects.

United Components (3450-TW): A leader in co-packaged optics (CPO) technology, with explosive monthly revenue and profit growth, offering immense long-term potential.

Targeted by Institutional Investors:

Hwa Ming (4979-TW) & Lian Ya (3081-TW): Operate in the optical communications sector with rigid demand. With global data centers and AI servers upgrading, order visibility is extremely high.

Kingboard (3653-TW): A top performer in thermal management technology. Its vapor chamber products are highly competitive, with a clear upward trend in all three profitability ratios.

Backed by Major Players:

Winchance (4989-TW), Asia Pacific Electronics (4939-TW), IET-KY (4971-TW), and Honeywell (8043-TW). These stocks maintain highly concentrated ownership even during market downturns, indicating that major investors are quietly building positions amid the chaos.

Triple-Ratio Growth Stocks:

Macronix (2337-TW): The worst of the memory market is over. Global production cuts have driven prices significantly higher. DDR4 pricing is strongly bullish, and gross margins and overall profitability are expected to improve markedly in the second half.

Futuristic (6805-TW): A global leader in folding phone hinge bearings with high patent barriers. With new product launches from clients and increasing shipments of liquid cooling quick-connect modules for AI servers, revenue momentum is strong, and gross margins significantly outperform peers.

Molex-KY (3665-TW): An expert in high-end connectivity solutions, deeply benefiting from AI server high-speed transmission demands and industrial applications. Revenue is at record highs, with a clear upward trend in all three profitability ratios, offering strong long-term earnings potential.

Kin Ming (2368-TW): The global leader in cloud server PCBs. The proportion of high-end AI server boards continues to rise, significantly optimizing the product mix and delivering excellent earnings growth.

Po-Lung (3163-TW) & Shang Chuan (3363-TW): Direct beneficiaries of silicon photonics and CPO packaging trends. They provide high-speed fiber optic connectivity and packaging technologies, essential for boosting transmission speeds in AI data centers.

Tayeh (2383-TW) & Chuan Lu (2059-TW): Dominant players in copper-clad laminates (CCL) and high-end server rails. Chuan Lu (2059-TW) secured a 10,000-rack order for a cloud giant's next-generation platform. Both companies hold unshakable positions in the AI server supply chain, providing solid, tangible profit support.

For more industry trend reports and intraday updates, join Jiang Jiang's LINE@:

https://lin.ee/vTaRqlQ

Jiang Jiang's daily market analysis videos are packed with valuable insights—don't miss the精彩 content!

Support us by subscribing, liking, and sharing with friends!

Source: Moore Investment Consulting – Analyst Kenny Chiang

The company has no improper financial interests in the securities recommended. Past performance does not guarantee future profits. Investors should make independent judgments, conduct careful evaluations, and assume investment risks on their own.