Taiwan Semiconductor Manufacturing Co. (TSMC) is facing a challenging trading day on December 17, 2024, as several factors weigh on its stock performance. The U.S. Department of Commerce's recent allocation of $406 million in CHIPs Act funding to GlobalWafers, a Taiwanese company, aims to boost domestic silicon wafer production, potentially increasing competition for TSMC. Additionally, the broader tech sector is experiencing a downturn, with the Nasdaq 100 dropping 0.8% as of 10:23 AM in New York, influenced by strong U.S. retail sales data and anticipation of the Federal Reserve's upcoming rate decision. This sector-wide pressure is contributing to the downward movement in TSMC's stock.
Moreover, despite some bullish sentiment in the options market, with significant investors targeting a price range of $140 to $240 for TSMC, the stock is currently trading at $200.46, down 0.87% as of 12:40 PM ET. The recent unveiling of TSMC's advanced 2nm process technology and the announcement of a $20 billion Arizona chip fab, with Apple as a key customer, have not been enough to offset the negative market sentiment. The stock's current RSI readings suggest it may be approaching overbought territory, adding to the cautious outlook among investors.
The Direxion Daily TSM Bull 2X Shares (TSMX) is trading at $30.78, reflecting a 2.46% decline from the previous close.