TSMC Jumps 3.38% To Record High On Heavy Volume As Rally Hits 7.4% In 3 Days

TSMC (TSM) surged 3.38% in the most recent session, extending a three-day rally totaling 7.40% on heightened volume. This decisive breakout to fresh all-time highs establishes a strongly bullish technical foundation for the stock.
Candlestick Theory
Price action exhibits a robust bullish breakout, with TSMC clearing the pivotal $233 resistance level during its three-day advance. The new all-time high at $248.28 creates an immediate resistance threshold, while prior congestion near $233 now transforms into primary support. The July 14 swing low of $226.31 provides secondary structural support, validated by the rejection of lower prices preceding the current rally.
Moving Average Theory
The bullish alignment of moving averages underscores a powerful uptrend. The 50-day SMA (~210), 100-day SMA (~196), and 200-day SMA (~180) maintain ascending slopes with the price trading above all three. This configuration confirms a sustainable long-term uptrend, while the most recent close ($245.60) sitting 16.9% above the 50-day SMA highlights accelerating momentum. The moving average stack currently presents no near-term resistance barriers.
MACD & KDJ Indicators
MACD exhibits a bullish impulse, with its histogram accelerating above the signal line as momentum strengthens. Concurrently, the KDJ oscillator reflects overbought conditions (K-value >80), historically coinciding with short-term consolidation during this uptrend. No bearish divergences are evident in either oscillator, though KDJ's elevated reading may precede near-term volatility.
Bollinger Bands
The bands expanded markedly during the 7.40% three-day surge, reflecting a volatility breakout from the prior consolidation zone between $226-$233. Price now trades near the upper band, typically signaling strength but also indicating extended near-term positioning. The bandwidth expansion supports the breakout's technical validity, though a reversion toward the 20-period midline (~$235) could materialize.
Volume-Price Relationship
Volume surged to 27.4 million shares during the breakout session – the highest level in over three months – providing decisive confirmation. The rally's sequence of rising volume on up-days (Jul 15: +3.62% on 14.3M, Jul 16: +0.26% on 15.1M, Jul 17: +3.38% on 27.4M) demonstrates increasing institutional conviction. This volume profile validates the sustainability of the breakout move.
Relative Strength Index (RSI)
The 14-day RSI (~76) resides in overbought territory (>70), indicating elevated momentum that may warrant caution for new near-term entries. Historically during this uptrend, similar RSI levels have preceded consolidations rather than reversals. While overbought conditions suggest potential for a pause, the absence of bearish divergence reinforces the underlying strength.
Fibonacci Retracement
Applying Fibonacci levels to the entire 2024-2025 advance from $133.57 to $248.28 reveals key technical thresholds. The recent pullback low of $226.31 precisely aligns with the 23.6% retracement level ($226.28), demonstrating textbook Fibonacci support. Major structural support resides at the 38.2% level ($204.52), though current momentum makes testing this unlikely near-term. The next projected extension targets cluster near $265 (161.8% projection).
Confluence & Divergence Observations
Confluence of bullish signals is evident: The breakout above $233 coincided with Bollinger Band expansion, MACD acceleration, and volume confirmation, creating a high-probability trade setup. The Fibonacci support at $226 aligning with the July 14 low further strengthens the technical foundation. No material divergences exist – RSI and MACD confirm new highs. Cautionary notes center on overbought readings (RSI/K) and extended proximity to the Bollinger upper band, suggesting potential near-term consolidation without yet indicating reversal risk. The convergence of long-term moving averages and Fibonacci levels creates robust support between $226-$233 for any pullback.