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JW Intelligence Report

Taiwan Semiconductor Manufacturing Co Ltd / TSM

StockTechnologySemiconductors
JW Rank60.4/ 100
Official close$420.16+2.64 (+0.63%)
Bid$420.14
Ask$420.55
Previous close$417.52
ATR (14)3.01%
RSI (14)48.4
Volume4.32M
Model reference$415.00
Upside scenario$435.00
Risk reference$405.00
Decision summary

TSM Option Market Prices in Bullish Sentiment

BalancedHigh confidence

The TSM option market displays a bullish outlook, driven by strong technicals, positive news flow, and robust earnings expectations. Implied volatility is elevated but term structure suggests backwardation, indicating potential for further upside.

Wheel contextThe market anticipates continued growth in TSM's core business segments driven by AI and HPC demand. Recent earnings exceeded expectations, and future guidance is expected to be positive.
Dated supporting context

JW AI outlook

Bullish

Short-term scenario

Cautious accumulate / hold for 1-3 weeks with bullish bias if support holds; high uncertainty from geopolitics and near-term catalysts (Nvidia follow-through, tariffs). Prefer entry on dip.

Three-month outlook

Constructive to bullish, with potential toward $450-500+ by late November if AI demand and Q3 results (est. Oct 15) confirm; supported by raised capex/guidance and expansions. Significant uncertainty: China-Taiwan geopolitical premium/risk, possible US tariffs, N2 ramp margin pressure, rich valuation (premium to GF Value), and broader market/AI capex digestion. Not a low-risk setup.

Market sentiment context

Predominantly bullish among investors and traders; TSM seen as core AI infrastructure play (picks-and-shovels for NVDA/AMD/Apple). Long-term holders emphasizing pricing power and capacity. Some caution on geopolitics and preferring pullbacks vs chasing. Recent posts note professional flow looking for break above $419-420 toward $425, with stops around $406. Institutional buying highlighted.

Observed market data

Price and technical structure

Dated end-of-day indicator set
Trend reference levels11 observations
20D SMA$419.64
50D SMA$422.50
200D SMA$370.15
9D EMA$418.20
21D EMA$417.95
20D MVWAP$420.03
YTD VWAP$383.16
Daily reference VWAP$417.91
Price vs 20D SMA-1.03%
Price vs 50D SMA-1.70%
Price vs 200D SMA12.20%
Momentum kinematics10 observations
RSI (7)46.01
RSI (14)48.40
RSI (21)49.10
Stochastic K48.22
Stochastic D49.89
MACD line0.13
MACD histogram0.07
ADX (14)8.24
MACD acceleration0.12
RSI velocity-0.55
Volatility and price boundaries11 observations
ATR (14)-0.13
ATR (14) %3.01%
Bollinger upper$431.94
Bollinger middle$419.64
Bollinger lower$407.33
Bollinger position0.32%
Volatility environmentMedium
20D realized volatility26.23%
Observed range position39.50%
5D true high$429.64
5D true low$410.12
Participation and institutional flow7 observations
Volume4.32M
20D average volume5.85M
Volume vs 20D average0.74x
20D SMA velocity0.77
50D SMA velocity-0.40
Institutional flow1.33
ATR velocity-0.13
Available cached indicators

Detailed decision indicators

Dated authorized values
Market overview7 observations
Price$420.16
DateAug 31, 2026
Volume4.32M
Vwap D$417.91
Mvwap 20$420.03
Change2.64
Change Percentage0.63%
Trend structure6 observations
Trend SignalBullish Recovery
Sma 20$419.64
Sma 50$422.50
Sma 200$370.15
Ema 9$418.20
Ema 21$417.95
Momentum structure9 observations
Rsi 746.01
Rsi 1448.40
Rsi 2149.10
Rsi SignalNeutral
Stoch K48.22
Stoch D49.89
Macd Line0.13
Macd SignalBullish
Macd Hist0.07
Volatility structure3 observations
Atr12.49
Atr Pct3.01%
EnvironmentMedium
Option market context3 observations
Current Iv30.96
Iv Rank6.01
Iv Percentile1.99%
Price boundaries8 observations
Bb Upper431.9
Bb Middle419.6
Bb Lower407.3
Bb Pctb0.32
True High$423.80
True Low$414.60
True High 5d$429.64
True Low 5d$410.12
Three-day velocities7 observations
Sma20$0.77
Sma50$-0.40
Mvwap20$1.33
Macd0.12
Rsi-0.55
Volume122,848
Atr-0.13
Risk radar5 observations
Earnings RiskLow
Earnings DateOct 15, 2026
Macro RiskUnknown
Vol RiskMedium
Structure RiskLow
Deterministic scoring

JW Rank factors

Higher scores indicate stronger observed structure
LiquidityTrading capacity and quote quality proxyCoverage 100%
99
Strategy FitGeneric Wheel premium-selling environment fitCoverage 100%
57
Technical TrendPrice trend, momentum and long-term structureCoverage 100%
61
Market Tail RiskMarket-wide volatility and tail-risk regimeCoverage 100%
32
Fundamental QualityBusiness quality and balance-sheet durabilityCoverage 100%
93
Volatility PressureOption premium pressure relative to realized movementCoverage 100%
37

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 Bullish Sentiment

The TSM option market displays a bullish outlook, driven by strong technicals, positive news flow, and robust earnings expectations. Implied volatility is elevated but term structure suggests backwardation, indicating potential for further upside.

Front ATM IV32.79%
Current IV31.32%
IV Rank7.34
IV Percentile2.79%
25Δ skew0.35
Term slope-2.41
Term structureBackwardation
Quote coverage100%
Median option spread6.67%
Term structure

Implied volatility by expiration

3 observed expirations
32.8%30.1%
ExpirationDTEATM IVState
2026-09-044.0032.79%—
2026-09-1111.0030.09%—
2026-09-1818.0030.38%—
Reference structures

Defined-risk observations

Bull Put Spread Reference

Expiration—
Short strike$405.00
Long strike$402.50
Net credit / share$0.50
Credit / width20.00%
$50$-200$401.13$406.38Expiration payoff per standard 100-share contract

Bear Call Spread Reference

Expiration—
Short strike$425.00
Long strike$427.50
Net credit / share$0.55
Credit / width22.00%
$55$-195$423.63$428.88Expiration payoff per standard 100-share contract
Evidence used
  • TSM's price action is above its 200-day moving average, signaling a long-term bullish trend.
  • The stock has recently pulled back from a 52-week high, creating a potential buying opportunity.
  • Institutional investors are accumulating shares, and hedge funds have increased their positions.
  • Positive news regarding new fab investments, AI demand, and chip orders supports the bullish sentiment.
Risk context
  • Geopolitical tensions between China and Taiwan could negatively impact the stock price.
  • Potential US tariffs on semiconductor exports pose a risk to TSM's profitability.
Strategy intelligence

Structural fit, not a trade instruction

Wheel fit score56.60

The market anticipates continued growth in TSM's core business segments driven by AI and HPC demand. Recent earnings exceeded expectations, and future guidance is expected to be positive.

Execution intelligence

Liquidity and quote conditions

Dollar volume$1.79B
Underlying bid/ask spread0.16%
Option quote coverage100%
Median option spread6.67%
Fundamental intelligence

Business quality context

Factor score93.10
Coverage100%

Business quality and balance-sheet durability

Latest strategy observation

TSM Covered Call signal

Aug 31, 2026 9:34 AM EDT

Covered Call | 2026-09-04 | short $420.00 | $7.10 credit | High turnover

Generalized structural observation only; no quantity, order instruction or personalized recommendation is provided.

Company and fundamental profile

Taiwan Semiconductor Manufacturing Co Ltd at a glance

Dated valuation, quality, growth and shareholder context

Market position and valuation

Market capitalization$62.50T
P/E (TTM)27.9×
Beta0.98
52-week range$1,145.00 – $2,535.00
52-week return17.52%
Shares outstanding25.93B

Profitability and financial quality

Return on equity39.86%
Operating margin56.38%
Net margin50.70%
Debt / equity0.20×

Growth and cash generation

Revenue growth (3Y)18.94%
EPS growth (3Y)19.11%
Free cash flow CAGR (5Y)26.54%
Revenue / share (TTM)172.3
Book value / share248.0

Shareholder return and calendar

Dividend yield1.99%

Trading and reference facts

MarketTaiwan Stock Exchange
CountryTw
CurrencyTwd
IPO date1994-09-05
Company website
Methodology, edition and field coverage
EditionOfficial Close
Ready sections3 / 3
Report identity6af27bea9c8c8a62bd3725a0

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.

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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