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KGI Securities: Taiwan Stocks Need Three Key Signals for a Sustained Rebound
Finance · Investment Banks/Brokers · economic_daily · 2026-11-08
KGI Securities warns that while Taiwan stocks show technical signs of a rebound, investors should wait for three specific signals before increasing exposure.
What Happened
Technical Correction Overview: KGI Securities notes that the Taiwan stock market has corrected by over 24% from its October highs, signaling a weakening short-to-medium-term trend. While technical conditions for a bounce exist, the 40,000-point level has shifted from support to resistance, making it a critical hurdle to clear.
Key Rebound Indicators: A sustained recovery depends on three conditions: the Philadelphia Semiconductor Index (SOX) ceasing to hit new lows, a significant reduction in foreign selling pressure, and the completion of margin debt deleveraging. Currently, margin balances remain high, indicating that chip volatility risks persist.
Operational Guidance: KGI advises investors to prioritize liquidity and reduce leverage in the current unstable environment. It is recommended to maintain a cautious stance and avoid excessive exposure until both technical and market-clearing conditions improve.
Shift in Stock Selection: The investment focus should pivot from speculative themes to companies with tangible earnings growth and solid fundamentals. Upcoming Q3 financial reports and October revenue data will serve as essential benchmarks for evaluating individual stock performance and future outlooks.