TSM Breaks Out of Downtrend! Can This Rally Hold? 📌 Key Observations from the Charts
1. Market Structure & Price Action:
* TSM broke out of a falling wedge pattern and is now retesting 181-182 resistance.
* Support Levels:
* 172.97 (key demand zone).
* 171.07 (critical support; failure here invalidates bullish move).
* Resistance Levels:
* 182.70 (current resistance; needs a breakout to confirm bullish momentum).
* 190+ (potential next target if momentum sustains).
* If TSM fails at 182, we could see a pullback toward 175-172 before another attempt higher.
2. Volume Profile & Auction Levels:
* POC: 180 → Major liquidity zone; expect consolidation around this level.
* Value Area High (VAH): 182.70 → A break above could open doors to 190+.
* Value Area Low (VAL): 171.07 → A loss here shifts control back to the bears.
3. Indicators Review:
* MACD: Strong bullish crossover, signaling momentum shift upward.
* Stochastic RSI: Overbought territory, suggesting possible short-term consolidation before continuation.
🛠️ Options GEX Analysis
* Call Resistance:
* 200-210 → Strong gamma resistance; unlikely to break without strong momentum.
* Put Walls & Support Zones:
* 175-170 → High negative GEX zones, indicating strong support.
* If TSM drops below 170, expect high volatility and a possible flush lower.
* Implied Volatility (IVR & IVx):
* IVR 54.3 | IVx Avg 51.4 → Moderate IV, with increased put activity.
* Call Positioning 4.7% → Bears still in control, but a shift in momentum is possible.
📈 Trade Setups & Game Plan
🟢 Bullish Scenario (Breakout Play)
🔹 Entry: Long above 183 breakout confirmation.
🔹 Target 1: 190 (next resistance).
🔹 Target 2: 200 (gamma squeeze potential).
🔹 Stop-Loss: Below 180 invalidates breakout.
🔹 Options Strategy:
* Buy 185C/190C expiring in 2-3 weeks for breakout confirmation.
* Sell 170/175 Put Credit Spread if bullish momentum holds.
🔴 Bearish Scenario (Failed Breakout)
🔹 Entry: Short below 179 breakdown.
🔹 Target 1: 175 (first demand zone).
🔹 Target 2: 170 (highest negative GEX & major support).
🔹 Stop-Loss: Above 183 invalidates short thesis.
🔹 Options Strategy:
* Buy 180P/175P for downside play if rejection at 182-183 confirms.
* Sell 190/195 Call Credit Spread if momentum weakens.
🎯 My Thoughts & Suggestions
* Main Bias: Bullish, but watch for confirmation.
* Key Pivot: 182.70 breakout = upside continuation, failure = pullback to 175.
* Gamma Risk: Heavy put support at 170—below this level, expect strong downside volatility.
⚠️ Disclaimer
This analysis is for educational purposes only and does not constitute financial advice. All trading involves risk, and past performance is not indicative of future results. Please do your own research and consult a professional financial advisor before making any investment decisions.