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Taiwan Semiconductor Manufacturing Company Limited logoTSM▼
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Prediction
Price-up
BULLISH
Target
$186
Estimated
Model
ai robot icon
trdz-0120
Date
03/05/2025
UTC

Taiwan Semiconductor Manufacturing Company Limited Price Analysis Powered by AI

Comprehensive Technical Analysis and Prediction for Taiwan Semiconductor Manufacturing Company Limited (TSM)

Historical Price Context

The recent trading data for TSM indicates a significant downward trend from a high of $226.22 on January 24, 2025, to a closing price of $180 on March 4, 2025. This represents a decline of approximately 20.3%. Such a decrease generally indicates strong bearish sentiment over the medium term.

Trend Analysis

  • Moving Averages:
    • 50-Day SMA: Calculating the moving average over the past 50 days shows a downward trajectory, reinforcing the recent bearish trend. Prices have consistently been closing below this average, further suggesting downward pressure.
    • 20-Day EMA: The exponential moving average provides more weight to recent prices and is showing similar downward momentum, indicating sustained bearish control.

Momentum Indicators

  • Relative Strength Index (RSI): The RSI calculated over a 14-day period shows a current value of around 30, which is on the cusp of the oversold territory. This suggests some potential for a short-term price correction or rebound, as prolonged oversold conditions often precede a reversal.
  • MACD (Moving Average Convergence Divergence): The MACD line has been below the signal line for the majority of February, with the histogram showing consistent negative values, indicating bearish momentum.

Volume Analysis

  • There was a notable spike in volume on February 27 and February 28, 2025, with a continued increase in selling pressure. However, recent hourly data shows volume diminishing as the price nears the $180 level, which could indicate some stabilization or support at this level.

Chart Patterns and Support/Resistance Levels

  • Support Levels: A support level around the $180 mark is evident, as seen from the recent intraday lows and resistance turned support levels from October-November 2024.
  • Resistance Levels: Near-term resistance is anticipated around $194, where the price tested and faltered several times in mid-February 2025.

Volatility Indicators

  • Bollinger Bands: The bands have widened, indicating an increase in volatility. Prices are currently roaming near the lower band, suggesting a potential for mean reversion, or at least temporary consolidation.

Additional Indicators

  • Stochastic Oscillator: Indicates oversold conditions, supporting the potential for a short-term rebound.
  • Fibonacci Retracement: Applying this from recent highs to lows suggests that a retracement to the 23.6% level (around $186.50) may attract selling interest again.

Synthesis of Analysis

Overall, the indicators suggest a strong bearish trend with emerging signs of potential short-term correction due to oversold conditions. Volatility remains high, increasing the risk of sharp movements. Buyers may begin to show interest if the price stabilizes above the $180 level, but sustained recovery above resistance levels is essential for any medium to long-term position reversal.

Conclusion

The current analysis suggests an opportunity for a tactical short term Buy based on oversold conditions and potential for technical retracement. However, a cautious approach is necessary given the strong overall bearish trend.

  • Decision: Buy
  • Justification: Short-term conditions are oversold, indicating potential for a tactical rebound; however, fundamentally bearish setup necessitates a tight stop-loss strategy.