“Taiwan Stock Market Compass” – Technical Weakness Does Not Hinder Bullish Outlook, Focus on Three Major Events

By admin Mar 17, 2024

Last week, after hitting a historical high of 20,112 points, the Taiwan stock market experienced a pullback, with a weekly decline of 102 points. The drop was partly attributed to TSMC (2330-TW), which accounted for approximately 248 points of the decline. Fortunately, rotation in some sectors helped maintain the bullish momentum. This week is expected to see several significant events, including TSMC’s ex-dividend date on the 18th, the FOMC meeting on the 20th, and Nvidia’s GTC conference from the 18th to the 21st, which will impact the AI supply chain. The Federal Reserve’s stance on interest rate cuts will also directly influence market sentiment.

Last week, foreign investors shifted from four consecutive buying sessions to a slight net selling of 3.02 billion NT dollars, while trust funds continued their two-week buying trend.

In terms of amounts, foreign investors sold the most in TSMC, with a net sell of 19.5 billion NT dollars, followed by Evergreen (2603-TW) with 6.38 billion NT dollars, and Yuanta Taiwan Selection High Dividend ETF (00919-TW) with nearly 4.5 billion NT dollars. Foxconn (2301-TW) and Himax (3034-TW) both sold over 3.2 billion NT dollars, while Delta (3324-TW) and Asus (2357-TW) sold over 2 billion NT dollars.

On the other hand, foreign investors heavily increased their holdings in Hon Hai (2317-TW) by 27.6 billion NT dollars, Delta by over 7.5 billion NT dollars, Yuanta Taiwan 50 ETF (0050-TW) by nearly 4.3 billion NT dollars, and Compal (2352-TW) by 3 billion NT dollars. World (5347-TW) and Richtek (2379-TW) saw around 2 billion NT dollars each, and they also entered positions in Cathay Financial (2891-TW), Yuanta Financial (2884-TW), and CTBC Financial (2882-TW), all with over 1 billion NT dollars, focusing on blue-chip stocks, indicating optimism for the future.

Trust funds also actively increased their holdings in Hon Hai by 8.2 billion NT dollars, followed by Evergreen with 3.1 billion NT dollars, Richtek with 2 billion NT dollars, and Largan (2385-TW), Nexcom (6121-TW), Himax (3034-TW), Delta (3324-TW), and Powerchip (6239-TW), all with over 1.6 billion NT dollars.

Market analysts believe that despite the pullback in TSMC, the commanding officer of the bull market, there were still 25 stocks with gains exceeding 15% last week, demonstrating the collective bullish sentiment. However, caution is advised regarding a potential technical correction in the broader market, and divergent performances among individual stocks are expected to continue.

Yong Fong Securities further explained that although the short-term technical outlook has weakened, it can be viewed as an adjustment, as the overall bullish structure remains intact. Last week, positive news from Hon Hai regarding AI server orders was released, and this week’s Nvidia GTC conference is expected to boost AI applications and reignite the leading role of electronic stocks in the Taiwan market. As for this week’s FOMC meeting, it is likely to uphold expectations for a 3-digit interest rate cut for the year.

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *