Taiwan Semiconductor April sales rise 60% y-o-y: should you buy the stock?

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is riding high on the waves of success, with its April 2024 sales figures painting a picture of robust growth. The company’s revenue surged by an impressive 59.6% compared to the previous year, reaching NT$236.02 billion. This remarkable performance is fueled by TSM’s position as a key supplier for tech giants like Apple, Nvidia, and AMD.

Despite earlier caution from CEO C. C. Wei regarding the semiconductor market’s growth prospects in 2024, TSM remains bullish about its future. The company anticipates a healthy expansion, especially in the foundry industry, driven by rising demand for semiconductors used in AI applications.

Moreover, TSM’s commitment to its shareholders is evident in its recent dividend announcement, with a cash dividend of NT$4 per share approved for the first quarter of 2024.

Now, with TSM’s impressive sales figures setting the stage, let’s dive into the charts to analyze the technical aspects influencing the company’s stock performance.

TSM’s long-term charts demonstrate the volatility that a highly cyclical industry like semiconductors faces. After falling to $40 levels amid the COVID bear market, the stock shot up to above $140 by February 2021 but found it hard to cross above $145.

TSM chart by TradingView

It again tried to cross the $145 barrier in January 2022 but failed. Earlier this year too, the stock shot up to a high of $158.4, but immediately retreated. Unless the stock closes above $145 for at least a week, there are chances that its short-term uptrend might again come to an end.

Investors who want to buy the stock must do so only once it closes above $145 for a week.

On the short-term hourly chart, we can see that TSM’s stock has largely been trading in the $125-$145 range for three months now. This range is again going to get tested today.

TSM chart by TradingView

For traders who are bullish on the stock, they can buy it near $147-$148, but should be cautious with their positions putting a strict stop loss near $134.6. If the stock continues to rally, they can book profit at $158 level or above it near $172.

Traders bearish on the stock can go short near the $150 level with a stop loss at $158.5. If the stock continues the trend of trading in a range, they can book profits near $125.

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