Opened Lower and Lost Quarterly Line, Late Session Narrowed Losses
Mixed earnings from U.S. tech giants, coupled with market doubts about the return on massive infrastructure spending, weighed on Asian stocks. After the previous day's surge, Taiwan stocks opened lower on Thursday the 29th, plunging more than 900 points intraday at one point. Fortunately, bargain-hunting buying emerged in late trading to lift the market, narrowing the decline, with the index closing down 667.25 points at 46,368.33 on slightly higher volume of NT$789.152 billion. Local institutional investors noted that although the market erased the previous day's long red candlestick and lost the quarterly moving average, support from the quarterly line below and the long lower shadow demonstrated resilience. In the short term, repeated bottoming around the quarterly line is expected, and investors are advised to focus on defensive and mainstream sectors with sound fundamentals and respond cautiously to market volatility.
Heavyweights Diverge, Financials Resilient, CCL Group Breaks Out
Divergent performance among heavyweight stocks was the main cause of index volatility. Market leader TSMC 2330 faced profit-taking, but pulled back on shrinking volume while holding above the 5-day moving average and the previous day's bullish gap. In contrast, UMC 2303 and Delta Electronics 2308 hit new swing lows amid bearish alignment of short- and medium-term moving averages. Driven by safe-haven demand, financial stocks became the highlight, with Fubon Financial 2881, CTBC Financial 2891, Cathay Financial 2882, and Yuanta Financial 2885 holding above all moving averages, and First Financial 2892 even hitting a new swing high. However, the over-the-counter market fell more heavily, with small- and mid-cap stocks pulling back notably, except for the relatively strong CCL group, such as Elite Material 2383, whose third-quarter revenue and profit hit new highs while holding the 5-day moving average, and ITEQ 6274, which rose against the trend on strong EPS of NT$12.88.
Institutions Watch Technical Support, Strict Stop-Loss If Short Averages Break
Amid high-level volatility, local institutional investors named several benchmark stocks for observation. For heavyweights and the AI supply chain, ASE Technology Holding 3711 entered consolidation after a sharp short-term surge and is expected to remain volatile until the bearish gap is filled. Memory and MLCC groups were lifted by buying in late trading, including relatively resilient performances from Walsin Technology 2492, Prosperity Dielectrics 6173, ESMT 3006, Team Group 4967, and Transcend 2451, while trading volume in Win Semiconductors 3105, Faraday Technology 3035, and Qisda 2352 is also worth tracking.
On the other hand, previously strong technology sub-sectors such as Largan Precision 3008 in optics, Chunghwa Precision Test Tech 6510 in semiconductor testing, Unimicron 3037 in IC substrates, GlobalWafers 6488 in silicon wafers, TXC 3042 in quartz components, Lightel 6442 in optical communications, and Gold Circuit Electronics 2368 in printed circuit boards could see their rebounds come to a temporary end if they break below short-term moving averages, so strict stop-loss discipline is essential.