Taiwan Stocks Consolidate at Highs: Sector Rotation, Position-Level Discipline and Stock Scenarios
TL;DR: Taiwan stocks near the 5 wan (ten-thousand) point level are only consolidating at highs rather than turning from a bull market, because money is still rotating and chasing prices and no heavy-volume black candlestick has appeared, so risk should be managed through position level and scenarios set in advance for key stocks such as Largan and ASPEED.
Key ideas
- Financial stocks naturally follow a bull market and are not defensive; money is again rushing into GlobalWafers and passive components that nobody wanted two weeks ago, which shows money is still flowing and will eventually return to TSMC.
- Position level is controlled by moving-average discipline: keep 75%–80% while the index is between the 5-day and 10-day lines, cut to 70% on a break of the 10-day line, cut to the 50s% on a break of the monthly line, and add again from scratch once it recovers the monthly line; since no one can be a prophet, you can only control your position level.
- The 337 investigation named Foxconn, Quanta and Delta Electronics, but they are AI companies that cannot be allowed to fail, so fourth-quarter revenue will not be poor and a decline is a chance to build positions; the market fell only 11 points despite multiple negatives, and the real key is the next day or two after Japan and Korea open.
- In a bull trend, hot stocks should pull back to the monthly line and find support politely, and pull back to the quarterly line and rebound politely; ASPEED drew 1,206 lots of heavy buying at its quarterly line, exactly where the previous rally began, which is reading the chart to tell a story; the approach is not to guess but to set scenarios first: if Largan does not open high and ASPEED does not rebound, market sentiment is poor.
- ASML's price increases being accepted even by Samsung and SK Hynix is a major industry positive, so equipment stocks are worth watching before TSMC's investor conference; on individual stocks, AUO is a short-term long holding the monthly line, Taiwan Glass has a trapped-supply zone above from five prior highs, and disposition stocks are restricted for only 5 days, so the impact has shrunk.
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
0:05Financial Stocks Rising and the Sector Rotation View
The host believes the rise in financial stocks is a normal feature of a bull market, not a sign of defensiveness. TSMC has not moved much in this leg, and money has shifted to chasing GlobalWafers and passive components, which shows money is still flowing. The host expects money to eventually return to TSMC, targeting 6 wan (ten-thousand) points, and sees the current phase as only consolidation at highs.
▶ Watch from here4:15Preview of Today's Topics
The host previews today's topics: the AUO theme driven by Largan, and which stock he prefers on a pullback after the 337 investigation named Delta Electronics, Foxconn and Quanta. Then the show moves on to the ranking of contributions to the Taiwan listed-stock weighted index.
▶ Watch from here4:45Breakdown of Contributions to the Weighted Index
The top three positive contributors are Hungjin, Largan and ASE, and financial stocks were also lifted; the main negative contributor is TSMC, but its decline is small. The host already cut his position level to the 70s% last week, and took profits on half of positions such as Nan Ya and Kinik.
▶ Watch from here
7:45Largan Price Target and AUO Short-Term Strategy
Foreign investors have called a price target of 1 wan 1 (ten-thousand and one thousand) for Largan, and the host expects it to break ten thousand next year. AUO closed with a red candlestick at the monthly line; as a short-term long, it is enough to hold the monthly line, and he sells part at 38 to 40 NT dollars. With a downside stop of 3% and upside of 7 to 10%, the reward-to-risk ratio is at least 1 to 3.
▶ Watch from here
11:35337 Investigation Negatives and Position Level
Foxconn, Quanta and Delta Electronics, named in the 337 investigation, are all AI companies that cannot be allowed to fail, so a decline is actually a chance to build positions. The market fell only 11 points despite multiple negatives, so the position level stays at 75% to 80%, drops to 70% on a break of the 10-day line, and drops further to the 50s% on a break of the monthly line.
▶ Watch from here
15:45ASML Price Hikes and Semiconductor Equipment Stocks
In the past only TSMC was willing to accept ASML's prices, but now Samsung and SK Hynix also accept the price increases, which is a major industry positive. Before TSMC's investor conference, one can watch the equipment stock All Ring, and Marketech, ASML's Taiwan agent.
▶ Watch from here
17:35Reading the Charts for Largan and ASPEED
Largan's black candlestick first broke the 10-day and monthly lines and then pulled up sharply; tomorrow it must defend 6800 NT dollars and the 5-day line, and it is a gauge of market sentiment. When ASPEED returned to its quarterly line, 1,206 lots of heavy buying appeared, at exactly the starting point of the previous rally; the host thinks a rebound to at least 1 wan 9 (ten-thousand and nine thousand) is no problem, and uses this to demonstrate the logic of "reading the chart to tell a story".
▶ Watch from here
19:55Setting Scenarios in Advance and Quick Notes on Strong Stocks
The host stresses not to guess but to set scenarios first: if Largan does not open high and ASPEED does not rebound, market sentiment is poor, because the stock market needs money from big players. He then quickly comments on strong stocks such as Long-Term Tech, Pegatron, Taiwan Surface Mounting and Hungjin.
▶ Watch from here25:15Kinsus, Chroma and AUO Volume
Kinsus has just crossed its quarterly line, though the quarterly line has not fully turned up yet (about 2 more weeks); the 5-day, 10-day and monthly lines are already in bullish alignment. If conservative, one can wait for a 2-day small black-candlestick pullback and then observe, with volume appearing being the key. Chroma has formed a triple top, and it can be traded only if volume can absorb the supply. AUO ranks first in turnover, but at only 28 wan (ten-thousand) lots, volume has actually shrunk.
▶ Watch from here
27:55Shipping Stocks Strengthen and Taiwan Glass Resistance
Shipping stocks such as Yang Ming are strengthening. Taiwan Glass closed with a doji; if it holds the bottom of the long red candlestick, one can bet on the previous high of 75 to 78 NT dollars, but above there is a trapped-supply zone formed by five prior highs. The host would sell half the first time it hits this area, but someone is absorbing shares with volume and may intend to break through.
▶ Watch from here
30:35Notes on UMC, Nan Ya, Alchip and Compeq
Nan Ya still holds the 5-day line and has a chance to fight again; Alchip needs a gap-up attack tomorrow; for Compeq, the bulls and bears are evenly matched across 2 waves of volume, and to break out it can only advance continuously along the 5-day line. UMC was impolite once near the monthly line and needs a red candlestick tomorrow; a big rise also requires positive news, because big players only profit above 140 NT dollars and have time to wait. The host still believes the fundamentals are there and a rise is only a matter of time.
▶ Watch from here
36:15Where Money Goes Besides TSMC
Whether Nan Ya can get through in the next few days is important; to bottom-fish AUO, it must hold the monthly line; Delta Electronics is roughly at a level to buy; Compeq is a retail favorite and also a holding, currently near cost, and he hopes it gets through; Winbond has good memory fundamentals, and Yageo and passive components have come back in this wave too.
▶ Watch from here
36:55Investment Trust Buying and Selling and Gold Circuit Positioning
Investment trusts added to Global Unichip, Gold Circuit Electronics, Macronix, Taiwan Union and ASPEED, and reduced Unimicron, ASE and GlobalWafers. Gold Circuit's revenue for months 9 and 10 may fluctuate, but the host looks at the long term into next year, with cost around 700–800 NT dollars, so a pullback is a chance to buy. He also sees signs of depreciation in the Japanese and Taiwanese currencies, so he is not very aggressive in the morning. Disposition lasts only 5 days and its impact has shrunk, so he actually dares to buy after a big drop on a second disposition.
▶ Watch from here
41:25Trading Mindset for Normalized Disposition Stocks
Disposition stocks have become normalized, like military service where you are held for five days and then released, and the sharpest ones grow bigger the longer they are held; if one falls below the 5-day line again, consider taking profits. Worth watching are the heavy-volume names coming out of disposition tomorrow and Winway, and he would also be interested in Kaori if it pulls back.
▶ Watch from here