Taiwan stocks rebound 939 points as volume shrinks to 7232億元
Taiwan stocks today (28th), driven by a 25 yuan rise in 台積電 (2330), rebounded 939.35 points to close at 47035.58 points, up 2.04%, with turnover of 7232.96億元, showing a pattern of rising prices with shrinking volume. Although all three major institutional investors were net buyers, trading energy still shrank significantly. Vice President 陳嘉偉 of Ch承通投顧 said volume is the root of price, and today's low-volume rebound is a bear-market rebound after Taiwan stocks fell more than four thousand points, weak in nature.
Warning M-top forming, possible break below neckline in November
陳嘉偉 pointed out in his YouTube program that this global stock market is a perfect storm, combining the 1997 Asian financial crisis, the 2000 dot-com bubble, the 2008 financial crisis and the 2010 European debt crisis. He said Taiwan stocks falling from highs each time mostly show an M-top pattern, with market sentiment often similar at the second top, and rebounds mostly led by non-electronics stocks. He believes such weak rebounds may eventually break below the neckline, and said bluntly that the November trend will be even more severe.
AI earnings dilemma, focus on Fed rate decision
On fundamentals, 陳嘉偉 noted AI tech giants face an earnings dilemma. The market had originally expected U.S. President 川普 (Donald Trump) to support the market, 台積電 investor conference, Nvidia GTC conference and U.S. stock earnings, but none of those expectations materialized. He quoted market views that if capital expenditure increases, the market questions companies' repayment ability; if capital expenditure slows, it is interpreted as the bursting of the AI bubble. In addition, Chinese open-source labs account for 70% of global Token usage, plus opposition from some U.S. residents to data-center construction, construction delays, and debt-financed investment unfavored by the market, ultimately leading to equity financing. He also said if the U.S. Federal Reserve (Fed) announces tonight that its rate decision keeps rates unchanged, it will be seen as bearish, because the market forecasts one rate hike each in October and December, meaning a December hike is certain.
台積電 quarterly line turns down, may retest 26882 points
陳嘉偉 said today is a critical volumeless rebound, a better selling point and shorting point. 台積電 saw the largest one-day point drop in history the day after its July investor conference, the subsequent rebound failed to make a new high, the October investor conference also failed to lift the stock, foreign investors continued net selling, and performance is already weaker than the broader market. He pointed out that tomorrow Taiwan stocks' quarterly-line basis-deduction position is the 31 July surge of 3186 points, 台積電's deduction position is the limit-up 2425 yuan, with the deduction level above the share price, causing the quarterly line to turn down and form resistance. 台積電 rarely sees its quarterly line turn down in the past; the previous time it fell 32.6% due to Trump tariffs, and the time before that it fell 46.2% due to the Russia-Ukraine war. If calculated with the same declines, a 32.6% drop in Taiwan stocks would be a symmetric decline to the annual line; a 46.2% drop would fall to about 26882 points, the 5-year line level. He stressed that Taiwan stocks' M-top is complete, the second top has begun to weaken, the rebound of more than 900 points is an exit opportunity, and bearish pressure has just begun.