TSMC Surges 7.92% As Technicals Confirm Strong Support At $280

Candlestick Theory
TSMC's most recent session formed a large bullish candle (+7.92%), erasing the prior session's sharp decline (-6.41%). This reversal pattern suggests strong buying pressure near the $280 support zone, which has been tested twice in October 2025 and once in early September. The October 10th candle shows a long lower wick (low: $280.33, close: $280.66), indicating rejection of prices below $280. Resistance is evident near $304–307, a level tested unsuccessfully on October 8th and 7th. Confluence between this price ceiling and the psychological $300 barrier strengthens its significance.
Moving Average Theory
The 50-day MA (calculated mentally from recent data) resides near $280, aligning with key candlestick support. Crucially, TSMC’s price currently trades above all three major moving averages (50/100/200-day). The 200-day MA near $208 anchors a long-term uptrend, while the 50-day crossing above the 100-day MA in late September signaled bullish momentum. However, the 7.92% surge widened the gap between price and the 50-day MA, potentially increasing vulnerability to a short-term pullback.
MACD & KDJ Indicators
MACD likely shows a bullish crossover developing after the recent rebound, shifting momentum from negative to positive. The October 10th sell-off briefly pushed TSMC into oversold territory per KDJ metrics, with the sharp recovery confirming a bullish %K/%D crossover. Both oscillators now signal building upward momentum, though MACD remains in negative histogram territory, reflecting residual weakness from the prior correction. No significant divergence is observed currently.
Bollinger Bands
Bands contracted notably in late September/early October, preceding the 7.92% breakout. The latest close above the upper band suggests overbought conditions in the immediate term and raises potential for consolidation or retracement toward the $295 midline. Band expansion confirms renewed volatility favoring bulls, but sustainability requires volume validation. Historically, similar breakouts (e.g., October 17, 2024, +9.79%) saw follow-through after brief consolidation.
Volume-Price Relationship
The surge on October 13th occurred on elevated volume (20.18M shares vs. 10-15M average), confirming conviction behind the breakout. Contrastingly, the October 10th decline saw even higher volume (23.4M), suggesting capitulation before the reversal. Volume patterns validate the $280 support’s resilience, with accumulation evident during tests of this level. Declining volume during sideways phases (e.g., September consolidation) preceded directional breaks.
Relative Strength Index (RSI)
RSI is estimated near 63 after the recent surge, moving away from oversold territory (<30 on October 10) but avoiding overbought (>70) conditions. This provides room for further upside. Bearish divergence occurred in early October as prices made higher highs while RSI formed lower highs, correctly foreshadowing the pullback. The indicator’s recovery now aligns with renewed bullish momentum.
Fibonacci Retracement
Using the swing low of $280.33 (Oct 10) and high of $307.30 (Oct 6), the 61.8% retracement aligns at $291. This level acted as support during the October 13th advance (session low: $292.32). A broader retracement drawn from the March 2025 low (~$170) to the October high shows the 38.2% level at $280–282, further validating this as critical support.
Confluence & Probabilistic Outlook
Strong confluence exists at $280–285 (50-day MA, Fibonacci 38.2% retracement, volume-supported candlestick rejection), making this a high-probability support zone. Resistance near $304–307 faces psychological and technical selling pressure. The MACD/KDJ crossovers, RSI reset, and volume-backed breakout suggest upward momentum may persist short-term, though Bollinger Band positioning and MA dispersion hint at near-term consolidation risks. A sustained move above $307 could trigger rapid advancement toward 2025 highs. Divergence has resolved, with momentum indicators now aligned with price action.