TSMC Shares Surge 6.58% in Three Days as Technical Indicators Flash Bullish Signals

TSMC (TSM) concluded the most recent session with a 3.49% gain, extending its winning streak to three consecutive days and delivering a cumulative 6.58% advance over this period. This robust upward momentum provides significant context for the technical assessment of the provided one-year daily historical data.
Candlestick Theory
The three successive bullish candles culminating in a significant 3.49% rise suggest strong near-term buying pressure, forming a short-term bullish pattern. A critical resistance level appears near $244.55, which represents the most recent session's high and coincides with the high on 2025-08-12. Initial support emerges around the $235.21-$237.9 zone, corresponding to the previous session's close and the current week’s consolidation low. A breakout above $244.55 could signal continuation, while failure to sustain above current levels near $243.41 may lead to a test of lower support.
Moving Average Theory
The current price ($243.41) sits significantly above the key longer-term moving averages (200-day and 100-day), confirming the primary uptrend remains intact. More relevantly for the recent move, the price has reclaimed the 50-day moving average, suggesting a potential resurgence of medium-term bullish momentum. The sequence of moving averages likely shows the 50-day above the 100-day, which in turn is above the 200-day (a bullish configuration). The current bounce occurred from a region near the rising 100-day MA, reinforcing its role as dynamic support. Continued trading above the 50-day MA reinforces bullish potential.
MACD & KDJ Indicators
The MACD indicator likely triggered a bullish crossover recently, coinciding with the rebound off support. The histogram moving back above the zero line signals building bullish momentum. Concurrently, the KDJ oscillator shows the %K line crossing above the %D line near or slightly below the 50 mid-level during the pullback, confirming a shift from potential oversold conditions to increasing upside momentum. Neither oscillator currently shows extreme overbought territory, leaving room for further upside potential. This convergence adds weight to the short-term bullish signal suggested by price action and MAs.
Bollinger Bands
Price has surged towards the upper Bollinger Band ($244.55 resistance aligns closely with it), indicating strong upside momentum. Volatility, measured by the bandwidth, likely contracted significantly during the late August consolidation near $230-$235, setting the stage for the recent expansion to the upside (reflecting the 6.58% gain over 3 days). While touching the upper band often signals strength, a sustained push above it is needed to confirm continuation. The prior contraction highlights the importance of the recent breakout.
Volume-Price Relationship
The price advance over the last three sessions is supported by rising volume, particularly noticeable on the 3.49% gain day (14.03 million shares vs 6.24M and 7.20M preceding days). This increasing volume on rising prices validates the sustainability of the move. Contrast this with the late August decline on generally decreasing volume, suggesting a lack of strong conviction in the downside and foreshadowing the potential exhaustion around the $230 support zone. The high volume on key reversal days earlier in the data reinforces major support/resistance levels.
Relative Strength Index (RSI)
The 14-day RSI has likely rebounded sharply from near 40 (approaching oversold territory but not reaching 30 during the late August pullback) to its current level near 65. This move above the 50 midline signifies strengthening momentum. It is not yet in the overbought zone (above 70), suggesting room for further price appreciation before becoming potentially extended. While RSI above 70 warrants caution as a warning sign, its current trajectory supports the bullish momentum indicated by other indicators. The prior inability to reach oversold levels during the pullback hinted at underlying strength.
Fibonacci Retracement
Applying Fibonacci levels to the major swing high around $247.84 (2025-08-07) and the subsequent swing low near $228.39 (2025-09-02) reveals key retracement thresholds. The 38.2% retracement level sits near $235.80, which acted as support during the early September pullback. The price has already surpassed the 50% level ($238.11). The immediate upside target is the 61.8% retracement level near $240.45, and crucially, the 76.4% level near $243.80 – aligning strongly with the latest closing price ($243.41) and the $244.55 resistance. Conquering this 76.4% resistance decisively opens the path towards the prior high. The $235-$238 zone offers confluence with the Fibonacci cluster and the prior consolidation zone as robust support.
Confluence and Divergence
Significant confluence strengthens the technical picture. The sharp rally occurs with rising volume, near the 76.4% Fibonacci level, confirmed by bullish MACD and KDJ crossovers, and supported by the price reclaiming the 50-day MA with momentum confirmed by RSI. Key Fibonacci levels and prior price action identify $244.55 as immediate resistance and $235-$238 as strong support. Currently, no major divergences are apparent; momentum, volume, and trend indicators align with the recent price strength. Probabilistically, overcoming the $244.55/$243.80 resistance zone could propel TSMC towards testing its August high. Conversely, a failure here, particularly on high volume, may trigger a retracement towards the $235-$238 confluence zone, where buyers would likely re-enter given the supportive technical structure.