Despite a continued rise by Nvidia (NVDA-US) reaching new highs, the broader U.S. stock market wasn't spared from losses. The primary indices collectively closed in the red as the benchmark 10-year bond yield soared past 4.600%, adding pressure to the already struggling markets. The Dow Jones tumbled by 1.0%, S&P 500 by 0.7%, Nasdaq by nearly 0.6%, and the Semiconductor Index by 1.8%. In commodities, New York crude oil fell by 0.7%, while spot gold showed signs of a bullish revival albeit with minimal change. New York metals remained stagnant. Bitcoin witnessed a slight pullback of about 1%, now priced at $67,650 per coin. Taiwan's futures market closed with a decline of 148 points.

In specific stocks, Apple (AAPL-US) saw a slight increase of 0.1% following an upgrade by analysts, whereas Microsoft (MSFT-US) dropped by 0.2%. META-US experienced a 1.1% decrease, Amazon (AMZN-US) remained unchanged, and Google (GOOG-US) fell by 0.3%. Nvidia continued its incremental rise by 0.8%, buoyed by the ongoing positive reaction to its stock split announcement (1-for-10). Server manufacturer Super Micro (SMCI-US) saw a significant drop of over 4.0%, chip giant AMD (AMD-US) fell by 3.7%, and semiconductor leader Broadcom (AVGO-US) dropped by 1.5%. Memory producer Micron Technology (MU-US) saw a decrement of 0.8%, while TSMC ADR (TSM-US) plummeted by over 3.0%. Tesla (TSLA-US) slightly fell by 0.3%, and AI PC indicator stock Intel (INTC-US) faced a 3.0% decrease, even as Dell (DELL-US) surged by a remarkable 7.9% in anticipation of its financial results due on May 30th. The pharmaceutical firms Novo Nordisk (NVO-US) and Eli Lilly (LLY-US) moved in opposite directions with the former falling by 1.0% and the latter rising by 0.4%. The BDI Index modestly rose by 0.3% with the Capesize Bulk Index (BCI) increasing by 2.5%. The Shanghai Containerized Freight Index recorded a slight drop of about 0.5% from its listing high.

Despite Nvidia's recent spike due to its stock split, contributing to a record high jump in its Tuesday trading session in the U.S. market, the ripple effects were adverse for Taiwanese stocks like TSMC (2330-TW), MediaTek (2454-TW), and Foxconn (2317-TW), all ending lower. Other Asian markets also suffered, with Japan's stocks falling by 0.7% and Korea's significantly more at 1.5%. Continued mixed performances were seen in companies closely linked to Nvidia, such as Super Micro in the cooling solutions sector, and Vertiv Holdings (VRT-US) exhibiting hardly any noteworthy changes despite the sensation around Nvidia.

Meanwhile, Dell, still basking in its recent highs, is keenly watched for post-market performance in the U.S. stocks on May 30th, its scheduled earnings release date. This could be pivotal, considering the upcoming Taipei Computer Applications Show in early June, where stocks tied to the event have already started showing signs of weakness yesterday, with Acer (2353-TW) continuing its decline. The focus isn't just on Nvidia but also on Dell's forthcoming financial reports which could potentially buoy the concept stocks linked to the computer exhibitions further.

As I have repeatedly mentioned, the Taiwanese stock market reaching new historical peaks with continuous highs indicates an unmistakable bullish trend. However, the pace of sector rotation is incredibly fast—often seeing stocks climb in the morning only to fall by evening. Day trading or short-term positions may not always be profitable, hence my advice against such short-sighted strategies. It's more prudent to aim for a broader perspective, focusing on underperformed stocks with potential for catch-up and adopting a swing trading approach for medium to long-term investment prospects.

Taking the shipping industry as an example, I remain bullish on the medium to long-term prospects of maritime stocks. Yet, just yesterday, we trimmed our holdings in Evergreen Marine (2603-TW) near the 227 mark (this cycle's peak was 229) partly due to its recent overperformance. Similarly, we exited positions in Pure Carriers such as Cheng Dian (2641-TW) despite maintaining a positive medium-term outlook, a strategy in line with my avoidance of chasing high prices. This disciplined approach of buying low and selling high, especially applied to Evergreen, has been demonstrated through our newsletters, guiding members since the pre-dividend price of 85 last year to achieve at least a double return on investment. The decision to sell off part of Evergreen was mainly because reaching new highs logically leads to profit-taking, especially when external forecasts push stock prices up, prompting an immediate pullback—an approach that leverages market trends effectively.

Next up, what stocks am I recommending for a strong performance? With the successful passing of the Dual Regulation in regenerative medicine, the biotechnology sector in Taiwan is poised for another surge. Genetron Holdings (4160-TW), which I highlighted in my free video on April 23 at 49, closed yesterday at 75.4, hitting the upper limit. Just after three days, on April 26, I recommended Genetron's parent company at 61; it closed today at 75.6—a testimony to the potential in following our free member videos for unexpected high-flyers.

Moreover, once again, I emphasize my highest preference in the electronics sector on Silicon Photonics CPO, HwaStar Opto (4979-TW), and notably, stocks related to Bitcoin that only I am spotlighting currently with a strong bullish outlook. Top pick for Bitcoin stocks, Qingyun (5386-TW), is set to turn heads.

This week's new targets have been recorded in my free video series. Do not miss another opportunity to profit—make sure to check it out. For those unsure about the current market dynamics and the bull-bear balance, it is crucial to watch my "Taiwan Stock Strategy" series!

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Analysis by: Qiu Ding Tai, analyst at Hengda Investment Consulting

Our recommended stock analysis does not involve inappropriate financial interests. Past performance does not guarantee future profits. Investors should independently judge, carefully assess, and bear investment risks.

Last edited at：2024/12/16