Large-Cap Giants Pause, Active ETF Core Stocks Surge – Institutions Name ‘These 3 Key Sectors’ to Lead Next Rally!

Although large-cap leaders have paused short-term, the momentum in small-to-mid cap stocks remains unstoppable! With clean positioning and a major shift in institutional capital, core holdings of active ETFs have become the strongest catalyst in the market. As the market returns to fundamental operating logic, which three key sectors will take the baton for catch-up rallies and possess the solid strength to sustain the rebound?

Monthly Resistance as Expected – OTC Index Drives Mid-Cap Catch-Up Rally

Today’s Taiwan stock market opened lower but rebounded higher, reaching a high of 43,784 points. It closed at 43,386 points, with trading volume around NT$844.5 billion. The index pulled back near the monthly moving average, aligning with Analyst Chen Zhilin’s prior warning about resistance at the moving average. Meanwhile, TSMC (2330-TW) fell 2.27%, suppressing the weighted index. However, the GreTai Securities Market (GTSM) index surged 4.32%, successfully taking over the rebound rally previously led by large-cap stocks.

Although today’s trading volume was below the morning forecast of NT$1.2 trillion, most benchmark stocks hit their daily limits early in the session, compressing circulating shares. Therefore, this cannot be directly interpreted as a price-volume divergence. Today’s focus isn’t shrinking volume, but where the capital is flowing.

Institutional Core Holdings Take the Lead – ABF and Thermal Management as Key Themes

Recent strength continues to center on major holdings of active ETFs and large institutional investors—confirmed again today. Creative (3443-TW), an ASIC indicator; Unimicron (3037-TW), an ABF substrate manufacturer; and thermal leader Chicony Electronics (3017-TW) showed strong momentum in early trading. This signals that after panic sentiment subsides, capital has returned to the operational logic of AI, high-speed computing, and high-end electronics supply chains.

Longwide (7795-TW), a relatively undervalued ABF equipment maker, also warrants continued observation. Compeq Manufacturing (3189-TW) officially passed a board resolution to expand capital expenditure for high-end substrate capacity. As major substrate manufacturers enter expansion cycles, equipment suppliers naturally stand to benefit.

The optical communications group had previously seen margin maintenance ratios fall into extreme zones. After continuous deleveraging, it has begun a rebound recovery alongside market stabilization. However, short-term volatility remains high, requiring time to consolidate above.

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Post-Rally Data Verification Phase – Maintain Disciplined Range Trading in Q3

Concerns over U.S.-Iran tensions pushing up oil prices have gradually eased. Asian equities are recovering after leveraged positions were cleaned out. However, after sharp declines and rebounds, the most reasonable path forward for the broader market is gradual consolidation with oscillation, rebuilding previous ranges.

We’re now entering a dense period of corporate revenue and earnings announcements. Stocks that rose merely on market momentum without fundamental or actual earnings support will face valuation correction pressure. Only high-quality stocks with verified data will have the foundation to sustain the rebound.

Take King Yuan Electronic (2449-TW), a semiconductor testing bellwether, as an example. Stocks with solid earnings foundations and relatively stable price behavior should still follow a range-based buy-low, sell-high strategy. In Q3, there’s no need to chase every sharp rally—return to range discipline, return to fundamentals, and maintain strict trading rules.

We invite investors to download the [Chen Zhilin Analyst App]. All real-time information is shared第一时间 within the app. Let data help you master market rhythm. Weekly updates to the margin debt watchlist will help you avoid risks and seize opportunities.

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Source: Chen Zhilin Analyst / Kaihsu Investment Consulting

Regarding individual securities recommended or analyzed by our company, there are no improper financial interests. Past performance does not guarantee future profits. Investors should make independent judgments, conduct careful evaluations, and bear investment risks themselves.