The Taiwan stock market has risen for five consecutive weeks, settling above 23,000 points. While investors are anticipating the moment it will break through this year's high of 23,943 points, experts analyze that there is a lack of additional short-term upward momentum and that the market must first overcome the 23,486 point level, where heavy selling occurred on July 22. However, a positive outlook was also presented, suggesting that with the momentum of artificial intelligence (AI)-related stocks, a new all-time high for the Taiwan stock market is only a matter of time.

Is the Short-term Rally Stalling? 23,486 Points Are the Key 

Yuanta Securities diagnosed that the current Taiwan stock market is maintaining an upward trend, trading above all moving averages and entering a zone where selling pressure accumulated earlier this year in an attempt to break through the all-time high. However, it pointed out that recent buying momentum has weakened, causing the index to hover near its high point, and specifically, it has still not surpassed the 23,486 point level where heavy selling occurred on July 22. This can be seen as a temporary pause in the rally, and the firm advised that in the short term, the 5-day moving average should be used as a support line to determine if the uptrend will continue.

Favorable U.S. Market and Anticipation of an AI Rally 

Liao Bing-kun, a fund manager for PGIM Prudential High Growth Fund, analyzed that the Taiwan stock market is also showing an upward trend, driven by the continuous record highs in the U.S. stock market and strong earnings announcements from major technology companies. Technically, the market has moved above its 5-day moving average, suggesting a short-term rally has resumed. However, he projected that for a sustained rally, the resolution of uncertainties is needed, and it is highly likely that the index will fluctuate at its high point for the time being.

Nomura Securities stated that the recent strength of the U.S. stock market is improving overall global market sentiment, which is positively impacting the Taiwan stock market. Furthermore, it projected that TSMC's (2330) optimistic earnings outlook will sustain the positive atmosphere in the Taiwan stock market. As earnings announcements from U.S. technology companies are set to continue, and according to projections by research firms, the overall profit growth rate for U.S. tech stocks is expected to be in the double digits, the Taiwan stock market is also expected to maintain its upward trend.

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