Taiwan Semiconductor Inventory Is Struggling Forward of Earnings

Taiwan Semiconductor Manufacturing Co. Ltd (TSM)  , the world’s main producer of semiconductor chips is on many buyers’ minds as of late for a number of causes.

The corporate is ready to report earnings this week so let’s check out the charts.

Within the every day bar chart of TSM, beneath, we are able to see that the shares have been reduce down sharply the previous 9 months. A low in July didn’t maintain up for lengthy and costs sank nonetheless decrease. TSM trades beneath the declining 50-day transferring common line and beneath the declining 200-day line.

The On-Stability-Quantity (OBV) line has been weak since February telling us that sellers of TSM are extra aggressive than patrons. The Shifting Common Convergence Divergence (MACD) oscillator (MACD) is bearish.

Within the weekly Japanese candlestick chart of TSM, beneath, we see an image the place the shares in all probability have additional to fall. Costs are in a serious decline and commerce beneath the negatively sloped 40-week transferring common line. No backside reversal sample and no decrease shadows inform me that merchants should not involved in shopping for at present ranges.

The weekly OBV line continues to be in a longer-term decline. The MACD oscillator is bearish.

On this every day Level and Determine chart of TSM, beneath, we are able to see that the shares reached and exceeded a draw back worth goal within the $72 space.

On this weekly Level and Determine chart of TSM, beneath, we are able to see a worth goal within the $45 space.

Backside-line technique: Within the latter levels of a bear market the shorts get nervous and sidelined patrons anxious — the end result generally is a short-covering rally. TSM may expertise considered one of these rallies at any time however the main path continues to be down. Keep away from the lengthy facet of TSM till a backside varieties.