We took profits in TSM in early October.
Now it’s back on my trading desk.
Taiwan Semiconductor Manufacturing Co TSM 0.00%↑ was our Top Pick of the Week on September 9, and that trade became a winner.
And no, I’m not chasing the same winner twice.
I’m doing something I believe every trader should consider: following a core group of stocks, getting to know their businesses, and looking for fresh opportunities when the setup changes.
We don’t need a new ticker every week.
We need good companies to follow, trading rules we trust, and the discipline to take profits when our targets are reached.
The September trade is over and this is a new setup and it needs a new plan.
Here’s the setup →
NIM Top Pick of the Week 👑
Ticker: TSM 0.00%↑
Company: Taiwan Semiconductor Manufacturing Co
Sector: Technology XLK 0.00%↑
Industry: Semiconductors
Valuation: Morningstar currently rates TSM four stars with a $534 fair-value estimate.
Dividend: Yes, pays quarterly.
Potential swing-trade target: previous high of $475
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Why TSM is Back on My Radar
Let’s start with the research.
On November 10, TSM reported record October revenue of NT$586.89 billion, up 59.7% from a year earlier and 14.7% from September.
For the first ten months of 2026, revenue increased 43.3% year over year.
That’s a powerful report from a company at the center of advanced semiconductor manufacturing.
TSM produces chips for businesses building AI systems, data centers, smartphones, and other technologies.
As demand for advanced computing grows, its manufacturing capabilities remain a major part of the story, but here’s what caught my attention.
TSMC is reporting record revenue while its stock has been pulling back.
That disconnect deserves a closer look. Strong business results don’t guarantee a rising share price.
Sometimes investors are worried about what happens next even when the latest numbers look impressive and right now Wall Street has plenty to think about.
The AI Boom Has A Complicated Side
AI spending remains enormous, but investors are asking tougher questions about the returns on that spending.
Barron’s recently highlighted the contrast between TSM’s record chip revenue and financial pressures elsewhere in the AI infrastructure boom.
It’s an important distinction.
Companies building AI data centers are committing huge amounts of capital to chips, facilities, electricity, and equipment. Those investments eventually need to generate enough revenue to justify their cost.
TSM benefits from demand for advanced chips, but it’s still exposed to changes in customer spending and investor expectations and because so much of its manufacturing footprint is concentrated in Taiwan, geopolitical risk remains part of the investment picture.
So we have a business reporting strong growth, analysts expecting continued demand, and a stock that has recently been under pressure.
That’s interesting, but it isn’t a reason to buy blindly. For that, I want to see what the chart is telling us.
TSM chart annotation →
Morningstar Sees Value. What About The Chart?
There’s another reason TSM deserves attention.
According to the Morningstar research I reviewed, TSM has a 4-star rating and a fair-value estimate of $534 per share.
TSM closed November 10 at $396.48.
That puts the stock approximately 25.8% below Morningstar’s fair-value estimate, with roughly 34.7% potential price appreciation if it eventually reaches that estimate.
For investors building a long-term portfolio, that valuation gap is worth studying.
However, I want to separate the long-term investment case from the short-term trade.
Morningstar’s $534 estimate isn’t my trading target.
It’s an analyst’s assessment of longer-term value. It can change and there’s no guarantee the stock will reach it.
My trading decisions begin with price action and TSM has just given us something to work with.
TSM closed above its 5-day exponential moving average of $389.27.
Under my trading rules, that’s a new buy signal.
Its 14-day RSI has also recovered to approximately 44, after approaching the extreme-low area during the recent selloff.
That’s a sign worth watching, but the stock hasn’t cleared all its resistance.
The first test is the 200-day SMA near $400.65.
If buyers can push through that level and hold above it, I’ll watch the 20-day SMA near $411.22.
A sustained breakout above the 20-day SMA would give me more confidence that the recovery is developing.
Remember, though: closing above the 5-day EMA and breaking out above the 20-day SMA are two different signals.
TSM has triggered the first. I’m still waiting for the second.
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Why I Keep Coming Back To Familiar Stocks
Here’s the bigger lesson behind this week’s pick.
TSM isn’t a stock I discovered yesterday.
I followed it before the September 9 feature. We traded it, took profits in early October, and moved on.
Now I’m looking at it again because something has changed.
The company has reported new results. The stock has pulled back. And a fresh technical signal has appeared.
META is another example of a familiar company where we’ve taken profits on a winning trade.
Neither previous win guarantees another one, but there’s a real advantage to following companies you understand.
You become familiar with how they respond to earnings, market corrections, industry news, and important technical levels.
You learn when a stock is worth watching and you learn when to leave it alone.
I think traders sometimes put too much pressure on themselves to find the next exciting ticker.
But why start from scratch every week when there are quality businesses you already know?
A core watchlist gives you companies to follow. Your trading rules tell you when to act and there’s an important distinction here.
A core trading watchlist isn’t necessarily the same as a long-term investment portfolio.
A company can deserve a place in a long-term portfolio because of its business prospects and valuation, while its short-term chart still calls for patience.
Sometimes I may be interested in the same company for both reasons, but each decision needs its own plan.
For a longer-term investment, I’m thinking about the business, valuation, and future growth.
For a swing trade, I’m focused on the entry, the potential profit-taking areas, and what would tell me the setup isn’t working.
Knowing a company well doesn’t mean I have to own it every day. It means I’m prepared when the next opportunity appears.
The Bottom Line
TSM is back as my Top Pick of the Week.
The company just reported record October revenue, Morningstar’s research suggests potential long-term value, and the chart has triggered a fresh 5-day EMA buy signal.
Those are good reasons to pay attention, but the short-term trade still needs work.
I’m watching $400.65 as the first resistance level and $411.22 as the next potential recovery target.
The risk to the downside is meaningful, and the nearest targets don’t yet offer the kind of reward-to-risk relationship I’d like.
So I’m not rushing.
We already had a successful TSM trade this year.
That trade is finished.
This one needs to prove itself and that’s exactly why I believe in trading a core group of stocks.
You don’t need to chase every headline or discover a new company every week. You can follow businesses you understand, take profits when your plan calls for it, and return when a fresh setup deserves attention.
We don’t need a new stock every week. We need a good reason to trade the one in front of us.
Following a systematic approach, reading market structure, and staying disciplined compounds over time.
Let me know what you’re watching and thank you so much for reading! 🙌
-Nurse Jess 🤝
Know the Big Picture. Focus on the Edge. 👑
Recent Top Picks of the Week
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Amazon caught my attention in Sunday’s Market Playbook when it was trading around $242, roughly 14% below Morningstar’s $280 fair-value estimate.
Top Pick of the Week: A Rare Bright Spot in a Weak Market
Sometimes the best trade is the one you don’t take.
📌 Bookmark this post. Track these setups through the week and see how they play out. This is how you develop an edge—by studying real-time trade ideas and learning what works.
Financial Disclaimer: This is not financial advice. All trades carry risk. Biotech stocks are highly volatile and speculative. Always do your own due diligence and consult with a financial advisor before making investment decisions.
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👑 We took profits in TSM in early October.
Now it's back on my watchlist with a fresh setup.
That's the beauty of trading a core group of stocks you know well.
You don't need a new ticker every week. You need a good reason to trade the one in front of you.
💬 Do you keep coming back to familiar stocks, or are you always hunting for the next opportunity?