Fri 20'th Oct 2017
Taiwan Semiconductor Manufacturing Company Ltd Stock Analysis
Technical stock analysis for Fri 20'th Oct 2017
Buy candidate since 2017-09-28 Gain 10.99%
Taiwan Semiconductor Manufacturing Company Ltd lies in the upper part of a strong rising trend in the short term, and this will normally pose a very good selling opportunity for the short-term trader as reaction back towards the lower part of the trend can be expected. A break-up at the top trend line at $41.64 will firstly indicate a stronger raising rate. Given the current short-term trend, the stock is expected to rise 12.5% during the next 3 months and, with 90% probability hold a price between $42.99 and $46.85 at the end of this period.
There are mixed signals in the stock today. A sales signal was issued from a pivot top point on Wednesday October 18, 2017, which indicates further falls until a new bottom pivot has been found. Taiwan Semiconductor Manufacturing Company Ltd holds buy signals from both short- and long-term moving averages. In addition, there is a general buy signal from the relation between the two signals where the short-term average is above the long-term average. On corrections down there will be some support from the lines at $41.01 and $38.51. A break down below any of these levels will issue sell signals. Volume fell during the last trading day despite gaining prices. This causes a divergence between volume and price and may be an early warning. The stock should be watched closely.
* Golden Star Signal* is when the short-term moving average, the long-term moving average, and priceline meet in a special combination. This combination is very rare and often followed by long and strong gains for the stock in question.
Relative Strength Index (RSI)
RSI14 is 86 and the stock is extremely overbought on RSI14, but may also ontinue to gain. Some stocks see their best performance while being overbought, but very seldom does RSI remain so high for a long time without short corrections. Risk has therefore increased and larger daily movements can be expected for the next couple of days.
Support & Resistance
Taiwan Semiconductor Manufacturing Company Ltd finds support from accumulated volume at $40.35. On the upside the stock meets some resistance just above today's level from accumulated volume at $41.25 and $41.50.
The stock is about to test the resistance from accumulated volume at $41.25 and this may cause the stock to take a minor break or get into a more sideways move for a few days.
This stock may move much during a day (volatility) and with a large prediction interval from the Bollinger Band this stock is considered to be "high risk". During the last day, the stock moved $0.29 between high and low, or 0.71%. For the last week, the stock has had a daily average volatility of 1.40%.
The stock is overbought on RSI14 and lies in the upper part of the trend. Normally this will pose a good selling opportunity for the short-term trader, but some stocks may go long and hard while being overbought. Regardless, the high RSI together with the trend position increases the risk and higher daily movements (volatility) should be expected. A correction down in the nearby future seems very likely and it is of great importance that the stock manages to break the trend before that occurs.
Our recommended stoploss: $39.64 (-3.59%) (This stock has medium daily movements and this gives medium risk. The RSI14 is 86 and this increases the risk substantially. There is a sell signal from pivot top found 2 days ago.)
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Several short-term signals, along with a general good trend, are positive and we conclude that the current level may hold a buying opportunity as there is a fair chance for this stock to perform well in the short-term.
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