The Taipei stock market opened low and traded higher this week, reaching a peak of 20,000 points before closing at 19,872 points, successfully staying above the monthly line. Senior analyst Lin Youming stated on the Finance Sunday show that Taiwan stocks have successfully formed a second leg, moving towards a slow bull market.

Lin pointed out that the atmosphere and the extent of washout during this stock disaster are arguably more severe than during the 2008 financial crisis, with the current maintenance ratio for margin lending being lower than that during the crisis.

To assess the stability of the second leg, he noted that the reduction in margin financing must exceed the index, and the divergence between the lows and the annual line must be at least 20%. After the first leg rebounds, the trading volume will necessarily shrink, as market confidence has not yet recovered. For the emergence of the second leg, the trading volume must exceed the five-day moving average, and investors can use this as a basis for judging long and short positions.