Schwab Commentator Recommends Bullish Options Strategy for Taiwan Semi (TSM)

Tom White, an analyst at the Schwab Network, unveiled a bullish options trade involving the world’s largest chip manufacturer, Taiwan Semi (TSM).

Meanwhile, Rick Ducat, another commentator on the network, presented a technical analysis of TSM stock.

A Bullish Options Strategy

In order to exploit TSM’s high implied volatility, White recommends buying May 16 calls with a $155 strike price and selling April 17 calls with a $170 strike price.

Traders who use this strategy will pay $8.50 of net premiums and have a break-even price of $160, White estimated.

A Technical Analysis of TSM

TSM’s “uptrend was broken” during the market’s recent selloff, as the stock “progressed into a falling wedge,” Ducat said. However, the shares did stabilize recently at their August low near $133.50 and re-entered their longtime range.

The “key area” that they need to surpass in order to achieve “a breakout to the upside” is $171, according to Ducat.

The Recent Price Action of TSM Stock

In the last month, the shares have fallen 11%, while they have sunk 26% in the last three months. But TSM has gained 4% in the last year.

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Disclosure: None. This article is originally published at Insider Monkey.