Opened Higher, Plunged 667 Points
After a volume-less rebound the previous day, Taipei stocks opened higher and plunged 667 points today, falling nearly 980 points intraday, with the daily candlestick showing an extremely weak high-volume bearish engulfing pattern. Analyst Chen Jiawei noted that tech earnings calls have turned into funerals, while heavyweights such as TSMC and high-priced thousand-dollar stocks have broken support, indicating the market is facing a perfect storm of AI P/E correction and reduced capital expenditure. Under the dual pressure of a rebound on low volume, selling on high volume, and elevated margin balances, Taiwan stocks may face a symmetrical decline toward the annual line ahead, with further downside risk toward the five-year moving average.
Volume-less Rebound, Heavyweights Weaken
From a technical perspective, although Taiwan stocks surged 939 points the previous day, turnover was only about NT$700 billion-plus, a typical volume-less rebound; today's decline was accompanied by expanding volume, with the long black candlestick fully engulfing the prior red candle body, confirming the end of the short-term rebound. Heavyweights were also weak, with market-stabilizer TSMC falling below the quarterly line, MediaTek showing a high-level reversal and pattern breakdown, and Delta Electronics hitting a new swing low. The market structure shows rebound on low volume and decline on high volume, with heavy overhead locked-in selling pressure, leaving the index still facing continued downside pressure in the short term.
Earnings Calls Turn Into Funerals, Groups Plunge
On individual stocks, electronics earnings calls have repeatedly fallen into post-earnings selloff traps. Companies including Macronix, LandMark, Chunghwa Precision Test Tech, Hon Jann and UMC saw shares plunge or lock at limit-down even after reporting record profits or expansion plans, reflecting that in a bearish mood the market interprets higher capital expenditure as oversupply. In addition, previously hot high-priced thousand-dollar stocks and silicon photonics concept stocks such as ASPEED, Wiwynn, Luxnet and Upcom have recently corrected by 30% to 60%, with margin balances staying high, adding to the risk of forced liquidation of bullish positions.
AI Valuations Under Review, Hedging Advised
Looking ahead, U.S. tech giants showed mixed performance after earnings, with share price volatility reflecting that the market is reassessing AI investment returns and P/E models. When valuation multiples are revised down, share prices will face the double hit of P/E and earnings downgrades. After pulling back from historic highs, the Taiwan Weighted Index is expected to seek next support at a symmetrical decline toward the annual line, with an extreme case not ruling out testing support at the five-year moving average. Before clear signs of stabilization and bottoming appear, investors should moderately raise cash positions or hedge, and avoid blindly buying on dips.