Daily PDF pending Latest workspace
Dated end-of-day edition
JW Intelligence Report

Taiwan Semiconductor Manufacturing Co Ltd / TSM

StockTechnologySemiconductors
JW Rank61.6/ 100
Official close$410.12-8.83 (-2.11%)
Bid$409.00
Ask$410.70
Previous close$418.95
ATR (14)3.33%
RSI (14)45.8
Volume6.61M
Model reference$405.00
Upside scenario$432.00
Risk reference$392.00
Decision summary

TSM Option Market Prices in Strong Fundamentals and AI Demand

BalancedHigh confidence

The TSM option market displays a bullish outlook, reflecting strong fundamentals, robust demand for AI chips, and a positive long-term growth trajectory. Despite recent pullbacks, the market anticipates continued upside potential driven by TSMC's dominant position in the semiconductor industry.

Wheel contextThe term structure shows backwardation, with near-term options priced at a premium compared to longer-dated options. This suggests market participants expect volatility to subside in the coming months.
Dated supporting context

JW AI outlook

Bullish

Short-term scenario

Cautious buy-the-dip / hold for bounce over 1-3 weeks if 405 support holds; high uncertainty from Nvidia earnings (imminent), sector weakness, and geopolitics. Not a high-conviction short-term trade.

Three-month outlook

Cautiously constructive. Sustained AI/HPC demand (now 66% of revenue), 2nm ramp, and raised guidance support potential recovery toward 450+ if execution continues and Nvidia results do not disappoint. However, elevated valuation, possible demand pull-forward, Taiwan geopolitical risk, and broader market volatility create meaningful downside uncertainty. Position sizing and stops essential.

Market sentiment context

Mixed short-term with notable put buying and some topping talk amid the pullback, but predominantly bullish longer-term as the core AI foundry play. Super-investor holdings highlighted, dip-buy setups watched at support, and strong fundamental conviction on AI demand. Options flow showed hedging rather than outright bearishness.

Observed market data

Price and technical structure

Dated end-of-day indicator set
Trend reference levels11 observations
20D SMA$413.91
50D SMA$424.30
200D SMA$366.96
9D EMA$417.10
21D EMA$417.34
20D MVWAP$410.32
YTD VWAP$382.44
Daily reference VWAP$409.87
Price vs 20D SMA-0.92%
Price vs 50D SMA-3.34%
Price vs 200D SMA11.76%
Momentum kinematics10 observations
RSI (7)39.94
RSI (14)45.80
RSI (21)47.54
Stochastic K34.27
Stochastic D40.36
MACD line-0.33
MACD histogram-0.15
ADX (14)10.40
MACD acceleration-0.32
RSI velocity-0.30
Volatility and price boundaries10 observations
ATR (14)13.67
ATR (14) %3.33%
Bollinger upper$440.77
Bollinger middle$413.91
Bollinger lower$387.04
Bollinger position0.43%
20D realized volatility39.30%
Observed range position34.45%
5D true high$430.97
5D true low$405.15
Participation and institutional flow7 observations
Volume6.61M
20D average volume7.06M
Volume vs 20D average0.94x
20D SMA velocity0.45
50D SMA velocity-0.08
Institutional flow0.43
ATR velocity-0.19
Deterministic scoring

JW Rank factors

Higher scores indicate stronger observed structure
LiquidityTrading capacity and quote quality proxyCoverage 100%
95
Strategy FitGeneric Wheel premium-selling environment fitCoverage 100%
66
Technical TrendPrice trend, momentum and long-term structureCoverage 100%
54
Market Tail RiskMarket-wide volatility and tail-risk regimeCoverage 100%
56
Fundamental QualityBusiness quality and balance-sheet durabilityCoverage 100%
93
Volatility PressureOption premium pressure relative to realized movementCoverage 100%
33

JW Rank is not a buy/sell rating, and coverage measures field availability—not accuracy or certainty.

Options Intelligence

What the closing chain was pricing

TSM Option Market Prices in Strong Fundamentals and AI Demand

The TSM option market displays a bullish outlook, reflecting strong fundamentals, robust demand for AI chips, and a positive long-term growth trajectory. Despite recent pullbacks, the market anticipates continued upside potential driven by TSMC's dominant position in the semiconductor industry.

Front ATM IV37.71%
Current IV34.02%
IV Rank18.43
IV Percentile15.14%
25Δ skew0.17
Term slope-4.80
Term structureBackwardation
Quote coverage100%
Median option spread6.61%
Term structure

Implied volatility by expiration

3 observed expirations
37.7%32.9%
ExpirationDTEATM IVState
2026-08-284.0037.71%—
2026-09-0411.0034.33%—
2026-09-1118.0032.91%—
Reference structures

Defined-risk observations

Bull Put Spread Reference

Expiration—
Short strike$400.00
Long strike$397.50
Net credit / share$0.56
Credit / width22.20%
$56$-194$396.13$401.38Expiration payoff per standard 100-share contract

Bear Call Spread Reference

Expiration—
Short strike$422.50
Long strike$425.00
Net credit / share$0.54
Credit / width21.40%
$54$-196$421.13$426.38Expiration payoff per standard 100-share contract
Evidence used
  • TSMC's Q2 2026 earnings beat expectations with strong revenue growth and raised full-year guidance.
  • The company's commitment to expanding its production capacity and investing in advanced technology reinforces its long-term growth prospects.
  • High implied volatility suggests market anticipation of continued price swings, but the overall skew is balanced, indicating a neutral outlook on directionality.
  • Strong institutional buying and super-investor holdings contribute to the bullish sentiment.
Risk context
  • Geopolitical tensions and potential supply chain disruptions pose risks to TSMC's operations.
Strategy intelligence

Structural fit, not a trade instruction

Wheel fit score66.20

The term structure shows backwardation, with near-term options priced at a premium compared to longer-dated options. This suggests market participants expect volatility to subside in the coming months.

Execution intelligence

Liquidity and quote conditions

Dollar volume$2.71B
Underlying bid/ask spread0.41%
Option quote coverage100%
Median option spread6.61%
Fundamental intelligence

Business quality context

Factor score93.10
Coverage100%

Business quality and balance-sheet durability

Methodology, edition and field coverage
EditionOfficial Close
Ready sections3 / 3
Report identity60ad2f6703a5a6fc03a68986

JW Rank is deterministic and is not a buy/sell rating. Narrative sections explain dated evidence and do not change the score or observed facts. Coverage measures field availability, not accuracy or certainty. This public edition remains fixed.

Continue with the same symbol

Carry TSM from this dated report into your Watchlist.

The report remains a fixed publication. The App and web workspace continue with current cached quotes, alerts, options context and symbol history.

Sign in to follow TSMCompare plans
Important disclosures. Generalized market-structure research only. This report does not consider holdings, objectives, risk tolerance or financial circumstances and is not an investment recommendation, transaction instruction, offer, solicitation or return forecast. Market data, model scores and AI explanations may be delayed, incomplete or incorrect. Past, hypothetical, model and settled-signal results do not predict future results. Options are complex and may involve loss of the entire premium, substantial or theoretically unlimited loss, assignment, early exercise, margin, liquidity and execution risk. Before trading standardized options, read the OCC’s Characteristics and Risks of Standardized Options. Terms of Use · Privacy Policy