Chart of the Day - Friday, July 24th, 2020

Revenge of the textbook ?? $TSM pic.twitter.com/YhEHatVXMi

— Arun S. Chopra CFA CMT? (@FusionptCapital) July 24, 2020

Today’s Chart of the Day was shared on Twitter by Arun Chopra (@FusionptCapital). It's a chart of the largest component in the Semiconductor index - Taiwan Semiconductor, $TSM. As Arun points out, this chart belongs in the textbooks, because it illustrates several classic chart patterns and technical concepts. The stock first got our attention in September of last year. At that point, price was testing resistance at $45 after forming a large base over the past year. In October, price broke out from that base and rallied 35% to a peak of $60 over the next four months. The stock then fell 25% along with the broader market earlier this year, causing price to retest former resistance around $45. Price briefly broke down, but quickly reclaimed that key $45 level. This confirmed a failed breakdown, which helped ignite a 68% rally over the past four months. In a comment to The Chart Report, Arun added; "This is really a story of relative strength. $TSM has been outperforming its peers on both a technical and fundamental basis." Like most great stories, this one has a happy ending with the stock closing at all-time highs today.