Pullback Plan Amid Persistent Foreign Selling: Cutting Exposure, Taking Profits in PCB, Waiting for the Monthly Line
TL;DR: Continued foreign net selling, a weaker Taiwan dollar and oil back at highs have worsened market flows, so the speaker cut his exposure level from nearly 90% to about 60%, mainly by taking profits in PCB, and will add only once foreign investors turn buyers again or prices reclaim the monthly line.
Key ideas
- Three things show whether flows are good or bad: the market can't hold up even with good news, the Taiwan dollar keeps weakening (foreign selling), and oil is back at highs. Foreigners net sold 1.96 trillion from January to October, bought in August and sold heavily again in October, wiping out this year's purchases; he will add exposure only when they are willing to buy 500–600 yi (hundred-million) of Taiwan stocks.
- When the index was too high foreigners did not buy, and after it broke the 5-day line the speaker started taking profits, cutting his exposure from nearly 90% to about 60%. If the quarterly line breaks again he will lower toward 50%, with a floor of about 40%, because a fund manager must always hold positions. A retest of the quarterly line usually brings about 2 days of a polite bounce.
- Money over these two weeks may concentrate in PCB: the TPCA show ties in with AI advanced packaging, and the glass-fiber cloth and ABF groups have held up relatively well as the market weakened. Investment trusts are already buying, which is enough to hold prices as long as foreigners stop selling. Tomorrow he watches advanced-packaging progress, AI GPU and ASIC volumes, material shortages and price hikes, and the upgrade from M9 to M11 materials.
- His trading discipline is to prefer selling too early over giving back all profits: he exited Tipoint twice near 540, keeps warrants short-term and takes profits when the 5-day line breaks or at the open, values PCB at 20–30 times next year's earnings and is willing to buy below 20 times, and always cuts losses when the setup is wrong because he can only rely on technicals.
- For stocks that have already broken their lines there is no need to rush in: wait for them to reclaim the monthly line and let the major players carry them first. A red candlestick after breaking the quarterly line is a new point to watch. AUO has consolidated near the monthly line by nearly 20%; he gives it two chances and will not hold on if it breaks a third time.
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Section summaries
0:05Pullback Risk and a Profit-Taking Stance
Continuing last week's warning, the Taiwan dollar's direction, oil's direction and the index breaking key lines are all pullback risks, so the speaker has been adjusting his exposure level step by step. His holdings are mainly PCB, and he has been taking profits gradually since last week. If tomorrow's PCB show good news still can't save the market, he will run fast, like Princess Vivi's mount "Run Fast."
▶ Watch from here2:25Three Flow Signals and Exposure Level
Three things show whether flows are good or bad: the market can't hold up even with good news behind it, the Taiwan dollar keeps weakening (meaning foreigners keep selling), and oil is back at highs. The speaker's exposure fell from nearly 90% to about 60%, mostly through profit-taking and a few stop-losses. Morning volume was projected to shrink to over 7000 yi (hundred-million), with about 2000 yi on the OTC market, showing many big players already trimmed from last week, so with the index down over 8% and individual stocks down 20%, the sense of panic is not heavy.
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5:55TPCA Show and Glass-Fiber Cloth Upgrades
The TPCA show opens on the 20th, with PCB tied to AI advanced packaging. Today the ABF-related names Unimicron, Kinsus, Nan Ya PCB and Taiwan Union Technology were relatively strong. Tomorrow he watches advanced-packaging progress, whether AI GPU and ASIC volumes expand, shortages and material price hikes, whether customers accept price pass-throughs, and the upgrade progress from M9 to M11, HVLP4 copper-clad laminates and Q Glass.
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8:05Resilient PCB Stocks and Foreign and Trust Flows
In the glass-fiber cloth group, Chuan Fu is already too high, Taiwan Glass is at the high end of its range, and Tehong has not fallen either. In ABF, Kinsus and Nan Ya PCB found support near the monthly line, Unimicron returned to the quarterly line, and Compeq also held up relatively well. Investment trusts are already buying, and as long as foreigners stop net selling, the trusts can buy prices up. Even if foreigners return to buy only 500–600 yi (hundred-million) of TSMC, it would have a stabilizing effect on Taiwan's flows.
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9:45Global Market Lows and Timing of Exits
Korean stocks have returned to their crash low, and Japanese stocks to the relative low of September 21. He did not rush to exit in the morning because the index was already very close to the quarterly line when it opened lower, and this was the first retest of the quarterly line after a big rally. Today he closed out one stock, with about 30% profit on the portion including added positions and about 16–17% on the part without additions.
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10:25Quarterly-Line Bounce and Cutting Exposure
When the index retests the quarterly line there is usually about 2 days of a polite bounce; the index is making higher lows, and of the past 5–6 touches of the quarterly line only July's broke noticeably deeper, and it still reclaimed it afterward. Those with only 10–20% exposure can add 10–20% near the quarterly line; the speaker has already cut from 90% to about 60%, will lower toward 50% if the quarterly line breaks again, with a floor of about 40%. Foreigners net sold 1.96 trillion from January to October, bought in August and sold heavily again in October; the Taiwan dollar falling back to its July level and bitcoin consolidating are also reasons he is conservative. He wants foreigners willing to buy 500–600 yi (hundred-million) of Taiwan stocks before adding exposure; this Wednesday's settlement and the PCB show are key, and money over these two weeks may keep concentrating in PCB.
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15:35Low-Priced PCB Stocks and Volume Accumulation
On the limit-up radar, besides Chuan Fu there are basic PCB names like Bai Cheng (6141), and low-priced stocks remain plentiful. The one he is more interested in is Taiding-KY: priced around 49, with market talk of a fourth-quarter swing from loss to profit and single-quarter EPS possibly above 1, and if next year reaches 7–8, some think the current price is cheap (he stresses this is market rumor). A volume breakout above 65.9 would mean someone is accumulating shares; although it would be foreigners doing so, he bets they are fake foreigners, not real ones. He also names PCB upstream players Jian Rong (5340), Tehong (5475) and Tipoint (8021).
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16:30Disposition-Stock Risk and Profit-Taking Discipline
Today was the first day Tipoint came out of disposition status, and the speaker says retail investors don't understand disposition stocks well enough. He exited Tipoint near 540 last time and again near 540 today, for a combined profit of over 25–30%. He sold early this morning when the limit-up couldn't hold, because last time Nan Ya also failed to hold limit-up and opened lower the next day; he would rather sell too early than accept giving back all his profit. In the PCB group, King Chin, Tehong and Bai Cheng stay strong; if Bai Cheng goes higher tomorrow there is still a leg up, otherwise it should hold the midpoint of this long red candlestick.
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18:25Creative Sensor Gauge and Short-Term Warrants
Global Unichip (Creative Electronics) pulled back to a key level today but still faces overhead pressure; the speaker isn't worried because it was never his main pick. Many people use it to gauge the market's strength, because when people play this kind of stock it means money is coming back. Jinshan Electronics, which fell more today, was a recent strong stock, and he reminds that warrants should usually be traded short-term, taking profits if the price breaks the 5-day line after a rise, or right at the open.
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19:05P/E Valuation and Broken-Line Watch
Yu Tian (3455) would be bad news if it breaks the quarterly line, but on next year's P/E it is low; the speaker values PCB at 20–30 times, is willing to buy below 20 times, and always cuts losses when the setup is wrong, because everyone says fundamentals are great for 2027 and 2028, so only technicals can be relied on. With foreigners still selling, he doesn't think the index must immediately make a new high in the short term; last year's high took 1–2 months too, and passing the 5 wan (ten-thousand) point level this time will also take time. Optical-communications stocks have pulled back more deeply; Landmark Optoelectronics has printed a red candlestick below the quarterly line, a new point to watch, and WIN Semiconductors (3105) has also stopped falling and consolidated near the quarterly line.
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20:10Wait to Reclaim the Monthly Line Before Entering
If you are truly afraid, wait for the price to reclaim the monthly line before buying and let the major players carry it first. Since the line is already broken there is no need to rush in; as long as the major players are willing to come in, the stock will keep rising once it is back above the monthly line.
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20:30Chuan Chen Flows and Big-Player Moves
Last week Chuan Chen branch trading was caught in stocks such as Jinshan Electronics and Gold Electric; today many people bought a few stocks, which the speaker takes to mean international money is coming in to bottom-fish. He doesn't much like Jinshan Electronics as traded by Chuan Chen, because from past observation they trade very short-term and leave when the next day opens higher; he would be interested only if it returns to the monthly line or the midpoint of the previous long red candlestick on volume. Big-player net buying that day was clearly concentrated in glass-fiber cloth.
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21:30AUO Mid-Term Defense Point and Gold Electric Valuation
AUO is back at the monthly line; the speaker says mid-term holders shouldn't exit for now. It has consolidated nearly 20% near the monthly line, and as long as it doesn't break again it is a mid-to-long-term defense point; holding firm on such a bad day for the index is significant. It was given one chance before and gets another here, and if it breaks a third time he won't cling to it. By trading value, glass-fiber cloth is still the main group, and PCB name Gold Electric is among them with strong action; at next year's EPS of 70, 20 times is about 1400 and 25 times about 1750.
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