For investors aiming to benefit from active market possibilities, a method that combines firm core business qualities with positive price movement can be especially persuasive. One such tactic involves searching for stocks displaying healthy growth, sound financial condition, and earnings, while also presenting technical breakout formations. This technique tries to spot companies with the foundation for continued value increase—strong profit and revenue growth—just as their share prices start to move from a period of sideways movement, hinting at a possible increase in pace. The aim is to locate possibilities where core quality and chart-based timing come together.
Taiwan Semiconductor Manufacturing Co., Ltd. (NYSE:TSM) is distinguished as a leading choice found using this view. As the globe's top dedicated semiconductor maker, TSM's core profile is founded on a technology advantage and critical function in the worldwide tech supply network. The company produces the sophisticated chips that operate everything from mobile phones and information hubs to artificial intelligence uses, situating it at the heart of several lasting expansion movements.
Fundamental Growth and Strength
The foundation of this search method is finding companies with outstanding and maintainable growth, paired with the financial strength to put money into their future. TSM's fundamental report highlights its skill in these fields.
Growth Measures:
- Powerful Recent Growth: Over the last year, TSM has recorded impressive growth, with Revenue rising by 31.61% and Earnings Per Share (EPS) jumping 46.39%.
- Firm Historical Pattern: This is not a single event. The company has shown a 3-year average yearly revenue growth of 23.25% and EPS growth of 27.10%.
- Firm Forward View: Experts anticipate this pace to persist, with predicted yearly EPS growth of 14.19% and revenue growth of 16.30% in the next years.
Earnings and Financial Condition: Earnings are important, as they pay for new investment and benefit shareholders. TSM performs well here, receiving a nearly ideal ChartMill Earnings Rating of 9 out of 10. Main strong points include sector-leading profitability, with an Operating Margin of 50.83% and a Return on Invested Capital (ROIC) of 25.03%, signaling very effective use of money.
While the company’s Valuation rating is modest, indicating its high cost, the report states this could be reasonable given its unusual earnings and firm anticipated profit growth—a typical trait of a high-caliber growth stock. Financially, TSM keeps a sound balance sheet with a good debt-to-equity ratio of 0.16 and firm cash position, backing its large investment spending plans for keeping technology leadership. You can examine the complete information in TSM’s fundamental analysis report.
Technical Setup and Price Movement
A firm core story is essential, but positive price movement can indicate the best moment for market players to pay attention. This is where the chart study part of the search includes a strategic element. TSM’s technical report describes a stock in a firm longer-term upward trend that is currently resting, possibly preparing for its next phase upward.
Trend and Results:
- The long-term trend is decidedly positive, with the stock price trading much higher than its important 200-day and 100-day moving averages.
- TSM has done much better than the wider market over the past year, surpassing 89% of all stocks.
- The short-term trend is currently neither positive nor negative, indicating a time of sideways movement after its prior rises.
Key Formation and Prices: The report points out that TSM is currently showing a bull flag formation. This is a continuation formation where prices decline slightly in a tight band after a firm upward move, frequently coming before a restart of the earlier upward trend. For this formation to be confirmed, a move above close-by resistance is important.
- Resistance: A clear resistance area is noted just above the present price, near $342.40-$342.41. A clear move above this price could be seen as the bull flag breakout.
- Support: If a decline happens instead, significant support is present near $325.73, with more levels below. This gives a sensible area for a protective stop-loss order.
This pairing—a firm long-term upward trend with a short-term sideways movement formation near resistance—gives the chart view a "setup" character, granting TSM a firm ChartMill Setup Rating of 7. The complete chart view, including graph images and specific trade setup details, is present in TSM’s technical analysis report.
Conclusion
Taiwan Semiconductor Manufacturing (TSM) offers a persuasive example for a growth-and-breakout investment idea. Fundamentally, it runs a business with a wide competitive edge in a lasting growth sector, shown by unusual earnings and strong profit momentum. Technically, its stock is in a verified long-term upward trend and is now moving sideways in a formation that often comes before more advances. The coming together of these elements—a strong growth foundation meeting a positive chart setup—is exactly what the combined search approach tries to discover.
For investors wanting to examine other stocks that fit similar standards of firm growth, sound fundamentals, and encouraging chart setups, you can execute the search yourself. Find more "Strong Growth Stocks with good Technical Setup Ratings" here.
Disclaimer: This article is for information and learning only and does not form investment guidance, a suggestion, or a bid or request to buy or sell any securities. The study provided is based on information and reports from ChartMill.com and should not be the only foundation for any investment choice. Investing in stocks includes risk, including the possible loss of original investment. Previous results are not a guide for future results. Always do your own complete research and think about talking with a registered financial consultant before making any investment choices.
