940 Billion in Shrinking Volume Hides Clues! Exclusive Data Reveals Selling Pressure Turning Point — Will Two Giants Launch High-Revenue Moves 'Now'?

Cooling U.S. economic data has boosted global stock markets, pushing Taiwan's equity market (Taiwan Stock Exchange) near its quarterly moving average. However, shrinking trading volume and profit-taking pressure now loom. Historically, after valuations recover to neutral levels, markets often enter a phase of range-bound consolidation and share turnover. Today’s environment presents both risks and opportunities. Investors should avoid chasing rallies and instead maintain capital flexibility while focusing on long-term core themes to hold onto profits during volatile trading.

Rebound on Shrinking Volume Enters Share Turnover Phase — Avoid Chasing Now

Weaker-than-expected U.S. July non-farm payroll data significantly reduced market expectations for Fed rate hikes, boosting global risk appetite. Taiwan’s weighted index opened strong today, peaking at 45,219 points — a nearly 1,000-point surge — and closing at 44,928 points, with trading volume around NT$847.3 billion. TSMC (2330-TW) briefly rose to NT$2,410 but closed at NT$2,380, and index gains narrowed notably in the final trading session.

Analyst Zhilin warned members early in the morning not to chase the rally, as trading volume failed to expand meaningfully. According to exclusive data, current market buying momentum and the number of strong-performing stocks remain largely unchanged from last week. Moreover, both the weighted and OTC indices are approaching the lower boundary of the previous quarter’s range, where profit-taking pressure naturally emerges.

This doesn’t mean the market outlook is bearish. Rather, after the rebound, the market is entering a phase of share turnover. Drawing from 2024’s deleveraging period, once valuations recover to neutral levels, markets rarely surge straight upward. Instead, they typically undergo consolidation and position reshuffling through volatility.

Optical Communication Fundamentals Strengthen — United Microelectronics’ Revenue Fuels Supply Chain Momentum

As discussed in last week’s program, U.S. optical communication stocks led the recovery, and now Taiwan’s related supply chain is taking over. United Microelectronics (3081-TW), a key upstream player, continues to show strong revenue momentum, prompting investors to seek opportunities downstream. Holtek Semiconductor (4979-TW)’s future growth potential warrants close attention. Win Semiconductors (6442-TW), after a period of base adjustment, now trades at a more reasonable valuation with lighter shareholding pressure.

Another route into CPO via optics: Advanced Photonics (3362-TW) remains in a trading suspension adjustment phase, but Largan Precision (3008-TW) has already shown early strength. Once a market leader signals strength, the potential for follow-on rallies becomes noteworthy. As Analyst Zhilin consistently emphasizes, themes rotate, but fundamentals and industry positioning ultimately prevail.

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ABF Demand Rises with Advanced Packaging — Chang Quan in a Key Equipment Position

AI chip specifications continue evolving toward larger sizes and higher layer counts. Whether TSMC (2330-TW) or Intel’s advanced packaging systems, demand for high-end substrates is rising, directly boosting ABF substrate and related equipment demand. Chang Quan (7795-TW), a specialist in high-end vacuum lamination equipment, becomes increasingly critical as substrate manufacturers expand capacity and upgrade equipment specifications. Today, the stock hit its daily limit up.

Now is not the time to chase every rebound. Instead, allocate capital to core supply chain stocks with sustained long-term growth fundamentals and unchanging industry trends. As market operations grow more challenging, selecting the right sectors and maintaining capital flexibility are key to holding onto fundamentally sound stocks. Investors are invited to download the [Analyst Chen Zhilin App], where real-time insights are shared instantly. Use data to master market timing, avoid risks, and capture opportunities with our weekly updated margin trading watchlist.

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Source: Analyst Chen Zhilin / Kaixu Investment Consulting

The securities analyzed and recommended by our company involve no improper financial interests. Past performance does not guarantee future profits. Investors should make independent judgments, conduct careful evaluations, and assume investment risks responsibly.