TSMC Shares Surge 14% in Six Days Amid Strong Bullish Momentum

TSMC shares demonstrated notable strength in the latest session, rising 3.79% to close at 260.44. This marks the sixth consecutive daily gain, yielding a cumulative 14.03% advance over this period. The stock reached an intraday high of 264.58 on above-average volume, signaling robust bullish momentum entering the analysis.
Candlestick Theory
A pronounced bullish pattern emerges with six consecutive white candles forming higher highs and higher lows, indicating sustained buying pressure. The September 10 candle features a long lower shadow (low: 257.75) and closes near the session high (264.58), reflecting rejection of lower prices. Critical resistance is now established at 264.58, aligning with the yearly peak. Support resides at 257.75, followed by the September 9 low of 246.93. The absence of reversal patterns like dojis or hanging men suggests continuation potential, though the extended rally heightens sensitivity to profit-taking near resistance.
Moving Average Theory
A robust bullish alignment is evident across key moving averages. The 50-day SMA (approx. 243.50) maintains its position above both the 100-day SMA (approx. 233.80) and 200-day SMA (approx. 219.20), confirming the golden cross pattern established earlier this year. Price trades substantially above all three averages (260.44 vs. 50-day), signaling strong upward momentum. The ascending slope of each average and the widening gap between shorter and longer-term SMAs reinforce trend strength. Consecutive closes above the 50-day SMA since late August demonstrate formidable near-term support.
MACD & KDJ Indicators
The MACD (12/26/9) exhibits a bullish configuration with the MACD line (approx. +5.80) above the signal line (approx. +4.20) and expanding histogram bars, confirming accelerating momentum. KDJ readings, however, flag caution: The %K (92) and %D (88) reside deep in overbought territory (>80), while the J-line (100) suggests extreme short-term exuberance. This divergence between MACD’s sustained bullish signal and KDJ’s overbought extremes may foreshadow consolidation. While not yet a bearish crossover, the stretched KDJ values increase susceptibility to pullbacks despite the primary uptrend.
Bollinger Bands
Price consistently tests the upper Bollinger Band (approx. 263.80, 20-day SMA +2σ), reflecting sustained upside volatility. Bandwidth expansion during the six-day rally signals strengthening directional momentum. The repeated touches of the upper band demonstrate conviction, but the lack of mean-reversion since early September increases near-term reversion probability. Support at the middle band (20-day SMA at approx. 249.50) would represent a healthy pullback target should consolidation materialize. The bands' expanding width suggests continued volatility dominance.
Volume-Price Relationship
Volume patterns validate the bullish structure. The rally days (September 5-10) displayed above-average volume, peaking at 18.78 million shares on September 10. Particularly noteworthy is the volume surge accompanying the September 5 breakout above 244.55 resistance. This ascent on expanding volume demonstrates institutional participation and enhances trend sustainability. Reduced volume during minor pullbacks (e.g., August 28-29) signifies limited selling pressure, further supporting the bullish thesis.
Relative Strength Index (RSI)
The 14-day RSI (79) resides deep in overbought territory (>70), consistent with KDJ warnings. While RSI can remain elevated during strong trends, the current reading exceeds levels seen during prior 2025 rallies. This divergence against the recent vertical price ascent hints at weakening underlying momentum. Traders should note that RSI readings above 75 historically preceded minor consolidations in TSMC over this dataset. However, the absence of bearish divergence (where RSI makes lower highs against price’s higher highs) prevents a strong reversal signal.
Fibonacci Retracement
Applying Fibonacci to the major swing low (161.42 on September 11, 2024) and the recent high (264.58) identifies key levels. The 23.6% retracement (253.40) and 38.2% level (248.42) align with recent consolidation zones and offer primary downside targets. Crucially, the 23.6% retracement (253.40) converges with the September 8 high (247.88) and 50-day SMA (approx. 243.50), creating a high-probability support cluster. The current price remains above all retracement levels, maintaining the uptrend structure.
Concluding Synthesis
A potent confluence of bullish signals dominates TSMC’s technical landscape, including moving average alignment, volume confirmation, MACD momentum, and Fibonacci positioning. However, overbought oscillators (RSI 79, KDJ >88) and Bollinger Band extremes flag short-term exhaustion risks near the 264.58 resistance. The absence of bearish reversals in candlestick patterns and the volume-backed breakout suggest pullbacks to the 253.40–248.42 Fibonacci/Moving Average confluence zone could attract renewed buying. While the primary trend remains decisively upward, traders should monitor oscillator divergences for early signs of consolidation within the prevailing uptrend. A confirmed break above 264.58 would target new highs, whereas failure to hold 253.40 may signal a deeper retracement.