Taiwan Semiconductor-SP ADR (NYSE:TSM) Fits the Minervini Trend Template with Strong Momentum and Growth Fundamentals

Taiwan Semiconductor Manufacturing Co., Ltd. (NYSE:TSM) has become a strong option for investors using the Mark Minervini Trend Template and high-growth momentum strategies. The Minervini method blends detailed technical analysis with key growth measures to find stocks showing clear upward trends and improving earnings potential. TSM's recent results match these standards, displaying both technical stability and solid growth foundations.

Why TSM Matches the Minervini Trend Template

The Trend Template looks for stocks in a clear upward trend, with specific moving average patterns and performance strength. TSM fits these requirements:

• Price Above Key Moving Averages: TSM’s current price ($241.83) is higher than its 50-day ($225.24), 150-day ($198.46), and 200-day SMAs ($197.70), confirming a long-term positive trend.
• Rising Averages: The 150-day and 200-day moving averages are increasing, showing continued momentum.
• Performance Strength: With a ChartMill Relative Strength (CRS) score of 89.91, TSM performs better than nearly 90% of all stocks, a key feature of leading stocks.
• Near Highs: The stock is within 3% of its 52-week high ($248.28), a sign of strong momentum.

These points match Minervini’s focus on stocks in "Stage 2" upward trends, where price pauses (like TSM’s recent range between $226 and $248) often lead to further gains.

Strong Growth Fundamentals

Beyond technical factors, TSM’s growth numbers support its place in high-growth screens:

• Earnings Growth: EPS rose 58.1% year-over-year (TTM), with quarterly growth reaching 60.7% in the latest quarter. This fits Minervini’s focus on earnings improvement as a driver of strong performance.
• Revenue Growth: Revenue increased 39.5% (TTM), with steady double-digit quarterly growth (38.6% last quarter).
• Profit Margins: TSM’s margins remain solid at 42.7% (last quarter), showing pricing control and operational effectiveness.
• Estimate Trends: While short-term EPS adjustments are steady, the long-term growth path stays strong, backed by demand for advanced semiconductor production.

Technical Upside Potential

ChartMill’s technical report gives TSM a rating of 9/10, highlighting its steady movement and pause near resistance at $245.60. A move above this level could point to further gains, with support at $231.36 acting as a logical exit point. The report also mentions a recent Pocket Pivot signal—a positive volume/price pattern often seen before upward moves.

Read the full technical analysis here.

Conclusion

TSM represents the Minervini strategy’s dual focus on technical stability and fundamental growth. Its fit with the Trend Template, along with strong earnings and revenue growth, makes it a top choice for momentum investors. While the stock is near its short-term peak, a move above $245.60 could provide a good entry opportunity.

For more high-growth momentum stocks meeting the Minervini criteria, check our predefined screen.

Disclaimer: This analysis is for informational purposes only and not investment advice. Conduct your own research or consult a financial advisor before making decisions. Read our full disclaimer here.