TSMC Dips 0.75% Amid Technical Resistance As Support Holds At $226

TSMC (TSM) declined by 0.75% in its latest trading session, closing at $228.67 after trading within a $226.31–$229.85 range. This movement occurs against a backdrop of significant volatility earlier in the year, warranting a multi-dimensional technical assessment.
Candlestick Theory
Recent price action shows a bearish engulfing pattern on July 10–11, followed by a failure to reclaim the $233 resistance zone. The $226–$227 range (July 8 and 14 lows) now acts as immediate support, while resistance solidifies near $232–$233, reinforced by multiple rejections in early July. A sustained break below $226 may trigger further downside toward $222–$224 consolidation zones from late June.
Moving Average Theory
The 50-day MA (approximately $219) and 100-day MA (~$209) remain below the current price, signaling an intact intermediate uptrend. However, the flattening 50-day MA suggests decelerating momentum. Crucially, the 200-day MA (~$194) maintains upward slope, confirming the primary bullish trend. A bearish signal would require the 50-day MA crossing below the 100-day MA, which currently lacks evidence.
MACD & KDJ Indicators
The MACD histogram has turned negative after a bearish crossover in early July, signaling fading upward momentum. The KDJ oscillator exited overbought territory (>80) in late June and now approaches neutral (K-line: ~45, D-line: ~50), reducing immediate reversal risks. No strong divergence exists, but the MACD’s persistence in negative territory may foreshadow further consolidation.
Bollinger Bands
Volatility expansion occurred during the June rally (upper band touch at $237.58 on July 3), followed by contraction as prices retreated toward the 20-day moving average (middle band, ~$227). Current prices hovering near the middle band suggest indecision. A decisive close below the middle band could trigger a test of the lower band (~$217), while reclaiming the upper band (~$238) appears unlikely near-term.
Volume-Price Relationship
Down days have recently accompanied elevated volume (July 7: -2.4% on 13.8M shares; July 10: -0.9% on 13.1M shares), confirming distribution pressure. Conversely, rallies like July 2’s +3.97% surge featured robust volume (12.0M shares), validating upside conviction. The latest session’s moderate volume (10.7M shares) during the decline suggests no capitulation, leaving room for further downside.
Relative Strength Index (RSI)
The 14-day RSI (current: ~48) has retreated from overbought conditions (>70 in late June) but remains neutral, showing no immediate oversold risk. This aligns with the KDJ’s neutral stance. Historical support reversals occurred near RSI 40–42 (late May, mid-June), making this zone critical to monitor for potential trend exhaustion if tested.
Fibonacci Retracement
Using the swing low of $133.57 (August 5, 2024) and high of $237.58 (July 3, 2025), key retracement levels are identified: 23.6% ($217.25), 38.2% ($201.35), and 50% ($185.57). Current price action holds above the 23.6% level, maintaining structural bullishness. Confluence exists near $217 (23.6% Fib and Bollinger lower band), making it critical support. A breach may target $201–$206 (38.2% Fib and volume-supported zone from May-June).
Multiple indicators reflect near-term caution: Bearish candlestick patterns, MACD negative crossover, and volume distribution validate the current pullback. Confluence exists at $217–$218 (Bollinger lower band, 23.6% Fib, and historical consolidation), making it a pivotal support zone for bulls. Conversely, recovery requires reclaiming $233 resistance with confirmed volume. The primary uptrend remains intact below $217, but failure here may trigger deeper retracement toward $201–$206.