Second Leg of Bull Market!? Domestic and Foreign Investors Frenziedly Buying! Is Taiwan's Stock Market Entering a Major Uptrend?

Although TSMC is consolidating laterally with shrinking volume, the overall market index has climbed above the 200-day moving average and continues to rise. Instead of forming a right-shoulder bottom as expected, the market is consolidating sideways without significant pullbacks, indicating stronger technical momentum. The monthly moving average has turned upward, signaling a technical shift to bullish momentum, and the market index is poised to challenge the 50,000-point level.

Since late July, Taiwan's stock market has surged approximately 6,000 points. Investors who missed the earlier lows cannot afford to overlook the current opportunity. The reason Taiwan's stock market can challenge 50,000 points or higher lies in its robust fundamentals.

Total revenue for 1,927 listed and OTC companies in July reached NT$5.79 trillion, a year-on-year increase of 41.8%. A record 205 companies reported all-time high monthly revenues. Electronics sector revenue hit NT$4.61 trillion, up 57.3% year-on-year. With such strong fundamentals, can Taiwan's stock market turn bearish?

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The reason Taiwan's stock market dropped to 40,000 points in late July was primarily due to global deleveraging: hedge funds (Situational Awareness) faced severe liquidations, Korean leveraged ETFs were drastically reduced, and margin balances among Taiwan investors significantly declined. Subsequently, global stock markets began to rebound. This wave of deleveraging is hard not to suspect as a 'Wall Street conspiracy'.

Taiwan's market has steadily risen this week, but margin financing growth has slowed. The main reason is that many margin-using investors have not yet recovered from the previous deleveraging phase, indicating exceptionally clean market positioning. From August to August 11, the weighted index rose 4.00%, and the OTC index surged 7.93%. Domestic institutional investors are buying small- and mid-cap stocks, while foreign investors have shifted from net selling in July to net buying in August. While margin investors remain hesitant or unable to buy, domestic and foreign capital have already entered the market. To avoid chasing at higher levels, now is absolutely the right time for investors to enter.

Investors may ask: how should they select stocks? Fundamentals are absolutely the most important factor. The AI industry is driving high revenue growth for listed and OTC companies in Taiwan. Whether through 'price hikes' or 'volume increases,' these will be reflected in July's revenue figures. Investors should focus on AI supply chain stocks with strong July revenue growth, such as ASIC, advanced packaging, PCB, thermal solutions, and power supply.

July revenue for listed and OTC companies rose 41.8% year-on-year, with 205 companies hitting record-high monthly revenues. With such strong fundamentals, Taiwan's bull market has ample ammunition. As the market challenges 50,000 points or higher, these stocks remain at relatively low bases. In addition to strong July revenue, investors should look for stocks still far from their previous highs, with 10-day or monthly moving averages recently turning upward.

Many stocks remain at relatively low bases, and when combined with future growth potential, their upside potential is even greater. Unsure how to enter or considering stock rotation? Join my community via:

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ASIC: MediaTek (3443-TW), Silicon Motion (3661-TW), APlus (6531-TW)

Advanced Packaging: TSMC (2330-TW), ASE (3711-TW), King Yuan Electronics (2449-TW), Powertech Technology (6239-TW), ChipMOS (6147-TW), Wealthy Link (6223-TW)

ABF: Nanya PCB (8046-TW), Unimicron (3037-TW), Kinsus (3189-TW), Zhen Ding (4958-TW)

CCL: TPK Holding (2383-TW), Taiming (6274-TW), Laminates Electronics (6213-TW), Nan Ya Plastics (1303-TW), Chang Hsin Chemical (1717-TW), Kingboard LME (8358-TW), Delong (5475-TW)

AI High-Performance Stocks: Hon Hai (2317-TW), Delta Electronics (2308-TW), Lite-On (2301-TW), AcBel (3017-TW), Wistron NeWeb (6285-TW), Molex (3665-TW)

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Source: Moore Investment Consulting – Analyst Yeh Chun-Min

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