Top Stock Picks for 2024: Taiwan Semiconductor

Don't let geopolitical tensions distract you from TSM's technical setup

Senior Vice President of Research
Jan 16, 2024 at 1:27 PM
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Every day for the next three weeks, we're going to highlight one of Schaeffer's top 12 picks for 2024. First up this week, we have chip stock Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM). To access the entirety of the 2024 report, click here.

Chipmaker Taiwan Semiconductor (TSM ) has reclaimed the $100 level, along with it's 20- month moving average. Reclamations of the latter favors that the stock price will be higher by the end of 2024, as tests have proven to be buying opportunities in the past. The TSM/SPY ratio is crossing above its 200-day moving average, and if this trendline holds and turns higher, TSM has shown a history of running longer-term.

A dominant player in artificial intelligence (AI), do not undervalue the chipmaker at the moment due to geopolitics, as there are signs that U.S. and China tensions are cooling. A weaker dollar could be a positive going forward if three interest rate cuts materialize like they're expected to next year. And in the options pits, there's large put OI buildup residing at $95 that could be traded against alongside a stack down to $80, potential support in the event of a significant selloff. 



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