Picking Stocks and Taking Profits After the Taiwan Index Breaks 5 萬 Points: Sector Rotation, the Valuation Method and Buying Dips
TL;DR: After Taiwan index futures broke 5 萬 points, Boss Lei raised his target, believing volume has not peaked and retail investors have not returned, so holdings can stay above 80%; but more stocks fell than rose today, so stock selection and profit-taking discipline matter more than chasing highs.
Key ideas
- After index futures passed 5 萬 points the target was raised; volume is only 1.1 trillion, not yet 1.5 trillion, and retail investors have not returned, so the holding level can stay above 80%. If the market fails at a new high, step aside first and look for a buy point after it stabilizes.
- The market rises amid half-belief, so you need to believe earlier than others: after last year's drop the index hit a new high in about 3 months, yet retail investors only woke up half a year later. Some call this a fake breakout, which instead suggests there is still fuel for further gains.
- Money is concentrated in the CCL, PCB, optics and IP sectors, and more stocks fell than rose, so individual stocks depend on selection and discipline: stay away from UMC after its high-volume black candle until the monthly moving average stabilizes, and if AUO breaks below its 5-day moving average, take profit on at least 1/3 to half.
- The valuation method: first assign a company a value, then look at the price; for example, ASPEED is valued at 3 萬 yet only costs 1.5 萬, so it looks cheap. A high share price is not the same as expensive; you are buying a good company, and you size positions by how much money goes into each stock.
- When buying dips, pick trend stocks near the quarterly moving average with flattening candlesticks, such as PCB, optical communications and passive components; do not catch stocks far from the quarterly line that keep falling. Treat low-priced stocks as trading vehicles, not as good companies.
Ask AI about this episode
Copy the prompt, paste it into an AI service, and add the question. The AI reads the notes on this site and links to the page and the video timestamps.
Or open directly:ChatGPTClaudeGrokPerplexity
Section summaries
0:05Index Breaks 5 萬 Points, Target Raised
Taiwan index futures have broken 5 萬 points, so the original target has effectively been reached and the Taiwan market target is being raised. Boss Lei believes volume has not peaked, so the holding level can stay above 80%. Today PCB and CCL stocks ignited, and about 6 of the stocks held hit limit-up, but on the main exchange more stocks actually fell than rose.
▶ Watch from here2:45The CCL Trio and PCB Sector Surge Together
Elite Material, Taiwan Union and ITEQ, the 3 CCL stocks, all hit limit-up together; foreign investors pushed their target price for Elite Material above 1 萬 yuan, and ITEQ is already up 40%. Chang Chun's stock is under disposition, so wait on the sidelines and buy after it is released; drill bit makers are poised, and Nan Ya also hit limit-up. ABF was exited at highs and rotated into other PCB names, with money shifting from low-base catch-up stocks back to high-base stocks.
▶ Watch from here
7:35Holdings and Responses Amid Sector Rotation
The market rotates in turn between sectors and between large and small caps; after 5 萬 points, having stocks you sold too early every day is normal, and what matters is making money. More stocks fell than rose on the main exchange, with nearly 60% of 1000 stocks down, so stock selection is the key. If the market fails at a new high, step aside first and look for a buy point after it stabilizes; looking back at the July 30 crash, nobody could go fully invested right at the bottom.
▶ Watch from here
11:15The Market Rises Amid Half-Belief
The market rises when everyone is half-believing, so you need to believe earlier than others. After last year's drop the index hit a new high in about 3 months, yet retail investors only woke up half a year later. A crash will not repeat 2 times within a year, and good companies at heavily discounted market values are a rare opportunity; don't wait until everyone around you is making money to enter. Some say this is a fake breakout, but Boss Lei thinks it means there is still fuel.
▶ Watch from here14:15Handling UMC's High-Volume Black Candle
UMC was already sold at 157–160, because Boss Lei thinks this year's target price of 160 is the baseline, and after reaching 160 only about 20% upside remains, while other stocks are more likely to exceed 20%. Today it formed a high-volume black candle; margin traders, foreign investors and investment trusts were all buying, yet it was still pushed down by over 5%, so stay away until the monthly moving average stabilizes; he would only consider it once it stabilizes near the monthly line, prints a stabilizing candlestick or returns above the 10-day and 5-day lines, preferring to be conservative.
▶ Watch from here
16:35Take Profit When AUO Breaks Its 5-Day Line
AUO traded nearly 100 萬 lots, closed with a black candle with an upper shadow and fell 3.46%, and Innolux did not help either, suggesting money is being pulled from low-priced, high-volume stocks. When the index nears its target, some stocks are swapped; if AUO breaks below its 5-day moving average, take profit on at least 1/3 to half, so that those following along can bank their gains.
▶ Watch from here18:55Earnings Call Season and Volume Watch
Largan holds its call this week and TSMC on October 16; Boss Lei is bullish on TSMC at 3000 and thinks 5 萬 points for the index is nothing unusual. Volume has not reached 1.5 trillion, showing retail investors have not returned; he warns against following the majority and brings up the valuation method.
▶ Watch from here21:15The Valuation Method: High Price Doesn't Mean Expensive
First assign a stock a value in your mind; for example, ASPEED is valued at 3 萬 yet only costs 1.5 萬, so if it feels cheap, buy it. A high share price is not the same as expensive; you buy a good company, not a high share price, and you should allocate by how much money goes into each stock, using an analogy to explain how to think about valuation.
▶ Watch from here24:35Low-Orbit Satellites and Optical IP Attack Together
Equipment stocks and low-orbit satellite concept stocks such as Yaohua and Compeq strengthened, and Gold Circuit hit limit-up. Genius Optical and Largan rose sharply, and IP design firms such as Alchip and MediaTek attacked at the same time; on 1.1 trillion of volume, both the optics and IP sectors rose together.
▶ Watch from here
27:05Stock Selection When Money Is Concentrated
After the big sectors are pushed up, other stocks have money pulled away and more fall than rise, so stock selection is important. The speaker says he does research at all times, employing researchers who visit companies and follow earnings calls; people without time need someone to help pick stocks.
▶ Watch from here28:45Stock Comments and the Low-Priced Stock Mindset
Dingyuan and the connector cable sector strengthened; for low-volume stocks, if they break the platform again you should at least reduce positions, and for recent strong stocks that break the 5-day or 10-day line, take profit first, then buy back later and defend with the monthly line. For UMC he sees 160 this year and 200 next year. Gold Circuit, where major players were net buyers, finally hit limit-up, and they have recently begun buying HannStar and Zhen Ding; low-priced stocks need not be treated as good companies, but as vehicles you can trade to make money.
▶ Watch from here
32:15Chip Radar and Active ETF Moves
Reviewing the October 2 active ETF trading daily report, ETFs trimmed ASE, Chenbro, AVC, Chang Chun and others, while GlobalWafers, the only one added, performed ordinarily. The speaker thinks the charts of Pan Jit and Chang Chun still have potential.
▶ Watch from here
33:45Currency Appreciation and Concentrated Big Money
He confirmed the Taiwan dollar, Korean won and Japanese yen are still appreciating, and thinks today's high-volume new high is nothing to worry about. Largan, Genius Optical, MediaTek and Alchip strengthened together, showing that within the 1.1 trillion volume, big money is concentrating on lifting specific stocks, and someone has to lead for you to get in.
▶ Watch from here34:55Disposition and Released Stocks and Strong Sectors
Dali, Hao Ding and Gaoli were placed under disposition, though he remains bullish on Dali and Gaoli; Quanxin, Xintec, Alchip and Visual Photonics come out of disposition tomorrow, and may lift the optical communications and equipment sectors. The PCB sector is strong, Compeq benefits from the low-orbit satellite theme and may break the earlier platform high, and Yaohua succeeded as a dip buy near the quarterly line.
▶ Watch from here
36:15Buy Dips in Trend Stocks Near the Quarterly Line
When buying dips, pick stocks near the quarterly moving average with flattening candlesticks that belong to a trend sector, such as PCB, optical communications and passive components; do not catch stocks far from the quarterly line that keep falling. Yaohua touching the quarterly line successfully is an example.
▶ Watch from here