The recent performance of the Taiwan stock market has fallen short of expectations, with the anticipated 520 market fail to materialize and the Computex theme also underwhelming. Last week, the stock market closed at 21,652 points, marking a weekly drop of 191 points and ending a four-week winning streak. Analysts believe that the future direction of the Taiwan stock market will be influenced by international news, particularly concerns surrounding Trump's tax cut policies and the associated debt deficit, as well as his threatening tweet on Truth Social regarding a 25% tariff on iPhones.

Given the recent fluctuations, funds have begun shifting from large-cap stocks to small and mid-cap stocks, resulting in a cautious market sentiment. With the upcoming Dragon Boat Festival holiday (May 30 to June 1), many investors are concerned about a potential 'market turnaround'. However, historical data over the past decade shows that the chance of an increase after the holiday can reach as high as 60%.

Consequently, seasoned analysts suggest investors keep an eye on sectors that have recently consolidated and shown signs of strength, including silicon photonics stocks, robotics stocks, the top three shipping companies, renewable energy stocks, and popular financial stocks. The Taiwan stock market has rebounded more than 4,200 points since early April, approaching the annual line. As long as the quarterly support level of 21,113 points holds, coupled with increasing volume and institutional buying, this could favor upward movement in the index.