Taiwan Stocks Plunge Despite AI Stocks Rising: Analyzing the Market Trend

Stock Market Plunge: US Tech Stocks Lead to Taiwan Stock Decline

Taiwan stocks experience significant drop amidst US market turbulence

Taiwan stocks plummeted by over 200 points today, following the negative performance of US stocks, particularly in the technology sector. This decline came after the Federal Reserve chose not to increase interest rates. Prior to the opening of the Taiwan stock market, news narratives surrounding the plunge in US tech stocks dominated financial discussions. However, there are a few exceptions to this trend. Contrary to the overall market decline, Taiwan AI concept stocks such as Gigabyte (2376-TW), Quanta (2382-TW), and Wistron (3231-TW) have rallied, suggesting a potential resurgence of bullish sentiment in the market.

Do AI stocks hold the key to Taiwan’s market recovery? If this holds true, it contradicts the previously mentioned reason for the decline in Taiwan stocks. While technology stocks suffered in the US market, the resilience of AI stocks presents an interesting dynamic for Taiwan. Today’s technical teaching example, TSMC (2330-TW), demonstrates a notable pattern. As predicted, with the decline of TSMC below the half-year line, Taiwan stocks followed suit, surpassing the 60,000 yuan mark. The upcoming week will be critical in determining whether TSMC can reclaim the neckline, as this will significantly impact Taiwan stock’s trajectory.

A deeper analysis reveals that TSMC is not the only stock facing challenges. Microsoft (MSFT-TW), another prominent AI stock, has also breached the half-year line. Market reports indicate that Microsoft has divested from NVDA (NVDA-TW), resulting in a 2.4% drop in Microsoft’s stock price and a 2.9% decline in Huida’s stock price. With both Microsoft and TSMC encountering this pivotal shift, it raises questions regarding whether Huida will follow the same downward trajectory. If so, it appears that Gigabyte, Quanta, and Wistron stocks will face imminent selling pressure instead of being attractive investment options.

Structural analysis and market implications

The recent volatility in the US market, particularly in the technology sector, begs the question of whether the Federal Reserve’s interest rate meeting signifies a temporary trade-off or a significant structural change. Despite the sharp decline in US stocks, the Dow Jones Industrial Average only experienced a marginal 0.2% decrease. Notably, biotech stocks, such as Amgen (AMGN-US) and United Health (UNH-US), emerged as the top gainers among the constituent stocks. These positive performances coincided with the continuous rise of Novo Nordisk (NVO-US) and GlaxoSmithKline (GSK-US), emphasizing their resilience in the face of market volatility.

As predicted by experts, the surge in crude oil prices has contributed to concerns regarding inflation. This, in turn, has influenced the Federal Reserve’s hawkish stance, leading to expectations of further interest rate hikes. The tech stocks’ vulnerability to high crude oil prices and rising interest rates has consequently impacted their performance. Additionally, the surge in raw materials, including coking coal and iron ore, has further amplified these effects. Notably, the Baltic Bulk Index has experienced twelve consecutive rises, underscoring the widespread impact of these factors.

After the Federal Reserve’s interest rate decision, the heavy decline in technology stocks suggests that blue-chip stocks may hold their ground or even witness an upward trend. As the Spring Festival approaches, the electronic and non-electronic sectors seem poised for a potential mainstream resurgence. Only time will tell how these structural developments shape the future of Taiwan’s stock market.

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Article source: Analyst Qiu Dingtai, Hengda Investment Consulting

Taiwan stocks fell more than 200 points today. I don’t need to explain why they fell suddenly! Because US stocks, especially technology stocks, plunged and the FED did not raise interest rates, before Taiwan stocks opened this morning, related news dominated all financial boards. , US tech stocks plunged, and Taiwanese stocks plunged.

But that’s not right!Taiwan AI concept stocks Gigabyte (2376-TW), Quanta (2382-TW) and Wistron (3231-TW) are bucking the trend and have risen, so bulls will come mainstream again. Are AI stocks? If investment friends think so, it is contrary to the reasons for the decline of Taiwan stocks mentioned above. It is reasonable for US technology stocks and Taiwanese stocks to plunge, but AI stocks have plunged in US stocks, and will AI stocks in Taiwan return to the mainstream? Don’t you think this is true? It’s strange. Actually, today’s TSMC (2330-TW), judging from our attached photo, is a very good technical teaching example. everyone a few days ago, when TSMC breaks the half-year line, the weighted index of Taiwan stocks will sooner or later break through the half-year line, which was confirmed today. Speaking of the concept of “level” in the structure of the stock market, there is a “moving average level” and a “pattern level” The half-year line is the moving average level. As for the level of the pattern, it is as shown in the figure. , TSMC fell below the neckline from late January to May, and covered the gap on May 25. This neckline and gap is exactly where the Taiwan stock market reached the 60,000 mark, so TSMC will If not can go back to the neckline (about 535 yuan) in a week, the chance of Taiwan stocks breaking 60,000 yuan will increase greatly. We want to discuss whether TSMC can quickly go back to the neckline If we look on the pattern, TSMC jumps today. The short drop below the neck line is very remarkable. an unfavorable gap for TSMC in terms of technical analysis. We call this gap a “deadhead gap” As the name suggests, this gap represents the formation of a large head. , the bulls cut it out without calculating the price, it is very difficult to save.

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We continue to conduct structural analysis. TSMC has broken the half-year line. We found that TSMC has also broken the half-year line. The same is true of Microsoft (MSFT-TW), a large-cap AI stock. market reports that Microsoft has disposed of NVDA (NVDA-TW) The stock price of Microsoft and Huida fell by 2.4% and 2.9% respectively Microsoft broke the half-year line, while Huida held on to the half-year line. have to ask again, Microsoft and TSMC broke the half year line. Will Huida come to test the half year line? In ” Regarding the ” Law of Large Numbers ” in practice, it is a reasonable conclusion that Huida will follow If this is true, Gigabyte, Quanta and Wistron will not only be unable to buy but will have to sell at highs. Simple logic means that TSMC is not good for the general electronics stocks. How could it be good, not to mention the fact that TSMC has a “head break gap” which is very unfavorable for bulls!

Going back to our conclusions from the last few days, is the FED interest rate meeting a long-short trade-off, or a structural change? Yesterday’s heavy fall in US stocks was in technology stocks, but Index A top class Dow Jones Industrial. only a slight decrease of about 0.2% Among the 30 constituent stocks, the top two gainers were Amgen Biotech (AMGN-US) and United Health (UNH-US). Among them, the stock price of Amgen Biotech (AMGN-US) hit ) 8-month high and approaching 8-month All-time Highs. Coincidentally, Novo Nordisk (NVO-US), the largest heavyweight in European stocks, and GlaxoSmithKline (GSK-US), the second largest biotech pharmaceutical stock in the UK, has continued to rise and even hit new swing highs despite the sharp drop in US stocks.

As the professor said before, soaring crude oil can cause inflation to return. This is the main reason for the FED’s hawkish bias, which will drive interest rates to continue rising. Oil prices crude and high interest are the biggest casualties of tech stocks. Crude oil has driven the surge in raw materials, coking coal, iron ore, and the Baltic Bulk Index is not alone either. The BDI rose nearly 4% yesterday, marking the 12th consecutive rise .Is there any reason why Taiwanese shipping stocks are not optimistic? Technology stocks are heavy after the FED interest rate decision. After falling, blue chip stocks may rise or resist the fall. Bulls will resume their upward trend after Spring Festival. The electronic or non-electric mainstream structure is ready to emerge!

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Article source: Analyst Qiu Dingtai/Hengda Investment Consulting

Individual guarantees recommended and analyzed by our company
No improper financial interests Past performance does not guarantee future profits.
Investors should make independent judgments, prudent assessments and bear investment risks at their own risk

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