Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) gained 0.22% in yesterday’s session, going up from its prior closing price of $40.35 to $40.44, and has now recorded rally in 5 consecutive sessions. Many in the market will be closely watching whether this winning streak is sustainable or take a temporary pause for the next couple of trading sessions. The stock price went upward in 8 of the last 10 days and has generated 9.15% during the last two weeks. Trading activity decreased by -3.15 million shares, and in total, 5.52 M shares exchanged hands for about $223.40 million. It should be noted that increasing price and decreasing volume show lack of interest and this is a warning that something has fundamentally changed.
Inside TSM’s Recent Trend
Taiwan Semiconductor Manufacturing Company Limited (TSM) has broken the narrow and weak rising the short-term trend up and an even stronger rising rate is indicated. For any reaction back there will now be support on the roof on the current trend broken at $39.13, a point that may provide a 2nd chance needed to hit a runner. The next trend top is most likely to be exhibited at $40.76 will be the next possible trend-top level and thereby pose a resistance level which may not be broken at the first attempt.
Taiwan Semiconductor Manufacturing Company Limited Technical Signals
TSM has witnessed its long term and short term MA triggering a buy signal. Many traders watch for short-term averages to cross above long-term averages to signal the beginning of a uptrend. Upon corrections, the price will meet support from the averages between $39.10 and $37.78. A break down through these support points will trigger sell signals. Its pivot point low generated buy signal on Thursday September 28, 2017, which calls for additional surge until the stock forms a new pivot point high. There was a decrease in volume but the price rose. This is usually not interpreted as a good sign as traders widely believe falling volume should see declining stock. Investors should be watching the price action like a hawk in the coming sessions.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) Support And Resistance Levels
In case of pullback, the next support the price will capture from accumulated volume will not be far away from current price at $36.85 and $36.22. It seems to be blessed by the accumulated volume as it meets no resistance above current level and favorable trading conditions will help the stock to show strong performance in the coming days.
It is important to note, however, that the stock needs to make its way through natural risk while testing a key support level. Once this support is broken, another support level will be to be established at a lower level. Turning back to this stock, Taiwan Semiconductor Manufacturing Company Ltd approaches the first support point just current price at $36.85. In case of a break, the next support we will see from accumulated volume is going to be at $36.22 and $36.10.
Taiwan Semiconductor Manufacturing Company Limited (TSM) Risk Assessment
The number of shares changed hands in the stock is good, indicating the interest and low risk associated with it. In the most recent session, the stock price hovered around $0.34 (0.84%) between intraday high and intraday low. Each day in the past 1 week, the average volatility remained at 1.01%.
The stock is extremely overbought on RSI14 (78). Normally this will pose a good selling opportunity, but since the stock has broken the trend up the chance for a major correction due to high RSI is very small as the stock will find support at the trend broken.