UMC Should I Buy
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UMC is not a good buy right now. The stock is breaking down below key pivot resistance (10.897) after a sharp drop (regular -3.78%, further weakness pre/post market), while near-term pattern odds skew to additional downside over the next week/month. With no Intellectia buy signals today and a fresh wave of mixed-to-negative analyst actions after earnings, the risk/reward is unfavorable for an impatient buyer. I would avoid new entries here (step aside) and only reconsider after a clear reclaim above ~10.90 or a capitulation-and-reversal off the ~9.55 support area.
Trend/price action: Strong down day into post-market weakness (post 10.07). Price is currently below the pivot (10.897), which tilts near-term bias bearish despite the broader uptrend. Momentum: MACD histogram is positive (0.0564) but contracting, suggesting bullish momentum is fading. RSI(6)=44.5 is neutral-to-soft, consistent with weakening demand after a rally. Moving averages: SMA_5 > SMA_20 > SMA_200 remains bullish (medium/long trend still up), but the current pullback is pressuring the short-term trend. Levels: Support S1=9.548 (key near-term line in the sand), then S2=8.715. Resistance at Pivot=10.897, then R1=12.245. Intellectia Proprietary Trading Signals
revenue came in above expectations in USD terms ($1.97B vs ~$1.91B referenced) and showed sequential improvement (Q3 to Q4). Hedge funds are reported as net buyers (buying amount +653% QoQ), which can provide medium-term support if the tape stabilizes. Long-trend is still supported by bullish moving-average stack (SMA_5>SMA_20>SMA_200).
Earnings quality headline was mixed: GAAP EPS missed estimates (by ~$0.01), which helped trigger the selloff. Sector/read-through risk: Qorvo’s weak guidance pressured the communications chain, relevant since UMC has meaningful communications/consumer exposure (also cited by JPMorgan). Near-term statistical pattern points to continued downside bias (model shows ~-4.39% next week, ~-8.86% next month).
Latest quarter: 2025/Q4. Growth was positive overall: revenue +6.66% YoY to ~$1.99B, net income +23.32% YoY to ~$324.0M, EPS +50% YoY (to 0.03 per snapshot), and gross margin improved slightly to 30.67 (+0.95% YoY). Fundamentally improving YoY, but the market reaction suggests investors focused on the EPS miss and forward demand/utilization concerns.
Recent trend: Wall Street has turned more cautious after a big run-up. In the latest batch (2026-01-28), BNP Paribas downgraded to Underperform ($8.60 PT) and JPMorgan downgraded to Underweight (PT raised to NT$50 but with a clear caution that the prior ~50% rally won’t be matched by EPS upgrades/utilization improvement). KGI upgraded to Neutral (NT$70 PT), but that stands out as the lone less-bearish move versus multiple Underperform/Underweight calls (including BofA’s prior downgrade to Underperform with a lower PT). Pros view: valuation/rally may have run ahead of fundamentals; demand/utilization risk in comms/consumer. Cons view (bull case): financials are improving YoY and the company is still posting revenue growth with stable-ish margins, but the analyst tone implies those positives may already be priced in.
