TSMC Jumps 3.57% As Bullish Technicals Test Key 307 Resistance

TSMC (TSM) rose 3.57% to close at 304.52 in the latest session, recovering sharply from the previous day's decline and testing key resistance levels. The technical analysis is structured as follows:
Candlestick Theory
The price action formed a bullish engulfing pattern on October 8, 2025, fully encompassing the prior session's red candle. This reversal signal occurred near critical support at 294 (October 7 low) and resistance at 307 (double top from October 6-7). The bullish close above 300 psychological level reinforces upward momentum, though repeated rejection at 307 establishes a formidable resistance zone. Immediate support now rests at 294, with secondary support near 291 (October 3 low).
Moving Average Theory
The 50-day moving average crossed bullishly above the 100-day MA in August 2025, with both subsequently ascending above the 200-day MA – confirming a major golden cross. Current price trades at 304.52, significantly above the rising 50-day (∼275), 100-day (∼250), and 200-day (∼215) MAs. This alignment signals a robust long-term uptrend. The steepening slope of the 50-day MA indicates accelerating short-term momentum.
MACD & KDJ Indicators
MACD shows a bullish crossover this week with the histogram turning positive, reinforcing the recovery from the October 7 dip. However, KDJ presents a cautionary signal: the %K line (89) and %D line (84) have entered overbought territory (>80), historically preceding 3-5% pullbacks during this rally. The divergence between KDJ's overbought reading and MACD's recent bullish reset suggests potential near-term consolidation before further upside.
Bollinger Bands
October's price surge has expanded the bands significantly, with the upper band now at ∼310. Current price trades near the upper band (304.52 vs. upper band at 310), typically indicating overextended conditions. Bandwidth expanded 22% this week, reflecting heightened volatility. A close above the upper band would suggest continuation, while regression toward the 20-period SMA (∼287) would signal consolidation.
Volume-Price Relationship
The October 6 rally to 307 occurred on the year's highest volume (15.7M shares), validating breakout attempts. However, the subsequent 3.57% gain on October 8 registered lower volume (12.7M shares) than the prior down day (13.1M shares). This negative volume divergence raises sustainability concerns for the current rebound, warranting confirmation from higher-volume follow-through.
Relative Strength Index
The 14-day RSI reads 72, crossing into overbought territory. Historically, RSI readings >70 since March 2025 have preceded 4-7% pullbacks within 5 sessions. This elevated reading coincides with the 307 resistance test, increasing near-term reversal probability. However, strong trends can sustain overbought RSI readings for extended periods.
Fibonacci Retracement
Applying Fib levels to the July-October 2025 rally (low: 228.39 on September 2; high: 307.3 on October 6) shows the current pullback held precisely at the 38.2% retracement (294). This successful defense of a key Fib level reinforces bullish sentiment. Immediate upside targets are the 161.8% extension (327), while a break below 294 opens risk toward the 50% retracement (291.5).
Confluence and Divergence
Confluence exists at the 294 support level, where Fibonacci retracement, the prior swing low, and the 20-day SMA intersect – creating a strong technical floor. However, negative divergences appear between: 1) weakening volume on recent up days versus the high-volume rejection at 307, and 2) the overbought KDJ/RSI readings versus MACD's bullish reset. These conflicting signals suggest consolidation between 294–307 before a decisive breakout attempt.