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TSM - New Growth Cycle with 100% Potential?

Long
NYSE:TSM   Taiwan Semiconductor Manufacturing Company Ltd
Is the world leading chip maker TSMC about to start a new growth cycle?

Fundamental indicators:
  • Revenue and Profits - exponential growth
  • Profit margin - is at circa 37%, impressive figure considering the growth levels
  • P/E - reasonable at 23x
  • Liabilities - no problems there

Risks:
  • Recession - is not likely to have a big impact on TSMC as demand on its products keeps growing, but it may impact share prices when the market starts correcting
  • China tensions - this is the highest risk to stability and future of this business which is difficult to assess but it certainly needs to be taken into account

Technically:
  • Following correction of 2020 there was an explosive growth in the share price of TSMC which indicates that it was wave 3 using Elliott Wave analysis
  • And looking at the structure of the correction that has developed since the peak - the impulse like movement at the end suggests it is an Extended Flat
  • At the lower time timeframe it is visible that the fifth wave of this impulse is quite choppy which indicates that ending diagonal is developing and soon there will be a reversal
  • Given the depth of the forming wave 4 is 50% (using Fibonacci level) the fifth wave maybe not as explosive and may reach $150 to $190, which is impressive 100% jump from the current price level

Alternative scenario - there is a possibility that wave 4 has not completed yet and it may drop further, however, at the moment it looks unlikely

Do you think that TSMC is going to start another impressive bull cycle?

Please share your thoughts in the comments and like this idea if you would like to see more stocks analysed using Elliott Waves .

Thanks
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