Testing The Underside

Trading Channel

Weekly Close, TSM

Starting with the weekly close of TSM below, we can see the recent top, breakdown and now test.

Closer-in on the next chart, the market’s testing resistance.

Looking at the daily close, it gets more intriguing.

Daily Close, TSM

Looks like TSM’s at the right edge of a downward channel.

Zoom-in

A reversal away from this area confirms the channel and weights probability to more downside (not advice, not a recommendation).

Summary

Taiwan Semi (TSM) is the largest cap in the Emerging Markets, EEM.

Leveraged inverse of the fund is EDZ.

If we get a reversal in TSM this session or possibly next, it may affect the overall emerging markets sector, dragging the EEM down as well.

Unless the tone changes (U.S. and world), meaning that volatility would have to subside, price action behavior at this juncture, suggests it’s a bear market.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279