Chipmaker Taiwan Semiconductor ( TSM) gapped higher on Thursday and is holding those gains on Friday.
Let's check out the condition of the charts and indicators.
In the daily bar chart of TSM, below, I can see that thes shares made a low in October. Prices rallied into late January/early February and then turned sideways. The sideways price action ended on Thursday when prices gapped to the upside and made a new high for the move up.
Trading volume was strong on Thursday and that helps to confirm the breakout. However, notice that the turnover was flat to declining in the three months prior to the breakout and that is not reassuring. The On-Balance-Volume (OBV) line has been flat since late January suggesting to me that buyers and sellers are in balance. The OBV line now looks like it is going to soon make a new high and that is good news for the bulls.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is turning upwards to a new outright buy signal with the indicator crossing above the zero line.
In the weekly Japanese candlestick chart of TSM, below, I can see a more positive picture than the daily bar chart above. Here I see the shares testing the 40-week moving average line and rallying to the upside.
I also see the trading volume increasing in the past two weeks. The weekly OBV line shows a rise from October telling me that buyers of TSM have been more aggressive than sellers.
The MACD oscillator moved above the zero line in January for an outright buy signal.
In this daily Point and Figure chart of TSM, below, I can see the recent price action with the gap "filled in." Here this charting platform yields a price target of $115.
In this weekly Point and Figure chart of TSM, below, a price target of $142.
Bottom-line strategy: While the daily chart is not as convincing or as bullish as the weekly candle chart, I would still favor the upside for TSM. My price targets ate $115 and then $142. Try to buy it close to $100 and then risk to $90.
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