Taiwan's market is drifting sideways on thin trading, but veteran analyst Du Jin-long sees Foxconn's recent slide as a buying chance rather than a warning.

• Foxconn shares fell after its earnings call, but the worry over slightly thinner profit margins is overdone since earnings per share are still rising.
• In this pullback Foxconn is down about 20% versus 14% for TSMC, holding up far better than other AI-linked stocks that dropped 30% to 60%.
• The wider index has bounced more than 7,000 points off its low, yet daily turnover is too weak to break through resistance near 46,000.
• Caution is creeping in: some managers have cut stock holdings to roughly a third to half and raised cash, waiting for a second dip to buy back.
• Elsewhere in Taiwan, Giant is spending big to take near-full ownership of materials maker Ding Mei, and cheap government-backed home loans hit their highest share of new mortgages since December.

Outlook: August and September likely stay range-bound, with a real rally only possible if trading volume picks up sharply, setting up a stronger fourth quarter.