TSMC Shares Jump 4.65% On Heavy Volume As Technicals Flash Bullish Signals

TSMC shares exhibited robust performance in the latest session, gaining 4.65% to close at $220.11. This advance marks the second consecutive day of gains, bringing the two-day return to 5.06%. The upward momentum coincides with expanding trading volumes, as evidenced by the 13.03 million shares traded – a significant increase from the prior day's 7.46 million shares. This price-volume synergy warrants closer scrutiny through multiple technical lenses.
Candlestick Theory
The recent bullish engulfing pattern over June 23-24 signals strong buying pressure. TSMC overcame resistance near $215.50 (June 20 high), with the latest candle closing near session highs. The failure to breach $213.88 support on June 23 establishes this level as immediate short-term support. A double bottom formation appears near $206.20 (June 23 low), while $220.37 (June 24 high) now serves as psychological resistance.
Moving Average Theory
Alignment across key moving averages confirms the bullish structure. The 50-day MA (approximately $198) remains above the 100-day MA ($193) and 200-day MA ($185), forming a golden cross configuration. Crucially, the current price trades 11% above the 50-day MA, indicating strong short-term momentum. This stacked arrangement with shorter-term averages positioned above longer-term ones suggests sustained upward trajectory potential.
MACD & KDJ Indicators
MACD exhibits a bullish crossover with histogram bars expanding positively, supporting continuation momentum. However, the KDJ indicator flashes caution with the %K line (86) and %D line (80) both entrenched in overbought territory. The indicators show directional alignment but conflicting signal strength: While MACD validates the uptrend, KDJ's extreme reading implies heightened vulnerability to profit-taking pullbacks.
Bollinger Bands
The bands are expanding sharply after the price broke above the upper band ($218), signaling increased volatility and directional conviction. This marks the first upper-band breach since April's rally. Historically, such breakouts in TSMC precede extended trending moves. The midline ($207) aligns with the 50-day MA, creating a robust confluence support zone should retracements materialize.
Volume-Price Relationship
The volume profile validates bullish sentiment. Up days consistently exhibit higher volume than down days, with the 4.65% surge on June 24 recording the highest volume (13.03M shares) since April 7. Volume expansion during upside breaks through $215 resistance confirms accumulation. The 50-day volume MA trending upward reinforces institutional participation.
Relative Strength Index (RSI)
Daily RSI has accelerated to 74, crossing into overbought territory. While this may warn of near-term exhaustion, its occurrence alongside expanding volume and trend confirmation reduces reliability as a standalone reversal signal. Previous instances when RSI exceeded 70 (April, January) coincided with extended rallies before meaningful pullbacks emerged.
Fibonacci Retracement
Applying Fib levels to the swing low of $176.47 (May 9) and high of $220.37 (June 24) reveals critical thresholds: The 23.6% retracement at $210 offers minor support, while the 38.2% level at $203.60 aligns with the 50-day MA and Bollinger midline, creating a high-probability demand zone. Notably, the recent breakout occurred near the 161.8% extension level ($217), potentially triggering momentum-based buying programs.
Multiple confluences reinforce bullish posture: Volume expansion validates price breakout above resistance, moving average alignment supports trend continuation, and Fibonacci levels coincide with technical support zones. The primary divergence appears in momentum oscillators, where KDJ's overbought condition contrasts with MACD's bullish crossover, suggesting potential near-term consolidation within the uptrend. Traders should monitor the $210-213 support band for signs of continuation versus profit-taking pressure.