How Much Higher Can Taiwan Stocks Go? Before 46,000 Points, I'm Watching These 4 Major Trends

Taiwan's stock market has rebounded rapidly, surging over 700 points in a single day and briefly breaking through the 45,000-point mark. However, trading volume was approximately NT$847.4 billion, with no significant expansion in volume accompanying the price rise. Markets typically interpret 'rising prices with shrinking volume' as a sign of weak upward momentum. But from another perspective, the previous correction phase saw a substantial decline in margin debt, resulting in a clear cleansing of market positions. Now, as the index recovers and margin borrowing begins to rise again, market chasing sentiment has not gone fully out of control—indicating that short-term holdings remain relatively clean. Therefore, rather than asking whether Taiwan stocks will break through 50,000 points in one go, it's more important at this stage to observe whether the rebound structure is healthy. Technically and based on past experience, the index still has room to advance toward 45,000 to 46,000 points or higher in the short term. But as it approaches 46,650 points, resistance will gradually increase. In terms of strategy, if the index surges rapidly, I would prefer to gradually reduce positions that have already gained substantial profits. If the market pulls back due to news, I would wait for new buying opportunities in strong sectors.

The key to the next phase of market movement will return to U.S. economic data and Federal Reserve policy expectations. After the latest weak non-farm payroll data, market concerns about rate hikes have eased somewhat. But the truly critical next indicator remains the CPI. As mentioned in the program, the market currently expects CPI at around 3.4% and core CPI at about 2.5%. If actual figures come in below expectations, the probability of rate hikes could further decline—clearly positive for global risk assets. Conversely, if inflation re-accelerates, markets may revise interest rate paths again, becoming a source of short-term volatility for both U.S. and Taiwan stocks. Notably, there are still no clear recession signals, and corporate earnings remain supported. Therefore, the most ideal scenario going forward isn't a sharp economic downturn, but rather moderate cooling in employment, continued decline in inflation, and sustained corporate profit growth. If this 'soft landing' scenario continues, what the market truly needs to guard against is rapid valuation expansion driven by excessive optimism.

Returning to Taiwan's fundamentals, TSMC remains the most critical core for judging market direction. July revenue rose 5.6% month-on-month and 44.7% year-on-year, showing that demand for AI and advanced processes continues to provide strong support. If TSMC continues to challenge new highs, the large-cap effect will inevitably push the index higher. But this doesn't mean every stock is worth chasing. What's truly worth watching is the industrial spillover effect created by capital expenditures: from TSMC and memory firms to substrate and PCB makers, all are increasing investments. The supply chains that benefit most directly from corporate capacity expansion are typically equipment, power, and cooling. Therefore, even if some substrate stocks have very strong fundamentals, I still believe there's no need to chase them aggressively when P/E ratios are already too high. Rather than chasing the already-soaring 'beauty queens,' it's better to seek out beneficiary groups within the same industrial trend that still have reasonable valuations and haven't fully reflected their potential—offering a more favorable risk-reward profile.

In terms of sector allocation, I still view memory, cooling, equipment, and power supply as the major trends worth tracking in this cycle. Memory, in particular, is no longer just a cyclical theme. Demand for memory capacity in AI servers continues to rise, with the market even forecasting a compound annual growth rate of around 19% in demand from 2025 to 2030. Companies like Nanya Technology and Winbond Electronics are also continuously increasing capital expenditures, indicating a shift in supply-demand dynamics. On the power supply side, Delta Electronics and Liteon have shown strong recent performance. Cooling benefits from rising power consumption in AI servers, and the long-term trend remains unchanged. What investors should truly do is not hold onto weak stocks from the last downturn, hoping for recovery, but re-evaluate their holdings. If the broader market has rebounded sharply but your stocks haven't kept up, you must consider whether you've chosen the wrong sector. There will always be the next opportunity. What matters isn't catching every move, but preserving capital during market corrections and deploying it to areas with solid fundamentals, growth potential, and favorable positioning once the mainstream trend is confirmed.

Do you still remember? I've long emphasized on the program that the real focus of this rebound should be memory, cooling, equipment, power supply, and power!

On August 4, I not only publicly shared that members who followed my recommendation on Liteon had already achieved three consecutive涨停 (trading halts), but I also directly told viewers: 'Even if you missed it, Delta Electronics is stable and has growth potential!' At the time, I even showed a foreign brokerage report projecting Delta's target price at NT$2,988. And now? **Liteon and Delta have both hit涨停 again!** No wonder more and more comments under the video say: 'Watching the professor's program really makes a difference!'

I've consistently reminded everyone: in this rebound, don't stubbornly hold onto losing positions in stocks like Global Unichip or silicon wafers, waiting for break-even. Instead, reflect seriously and **shift your capital to mainstream industries with real growth, strong themes, and institutional attention!** Aren't memory, cooling, equipment, power, and electricity now being proven one by one?

A good teacher doesn't just tell you to chase at highs, but **knows when to take profits at the top and has the courage to shift capital to low-base, low-P/E, high-growth stocks early at the bottom.** Have I delivered in this cycle? You know the answer best!

And now, I'm starting to focus on the next batch of low-base, low-P/E, high-growth 'power stocks' and 'optical communication stocks,' along with 'exclusive memory' stocks with unique insider insights.

Want to know which stock is next? Want to follow my investment rhythm?

Contact me now—don't wait until the stock rockets and regret it!

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