TSM road to $340 target and strategic correction

Our prior analysis established Taiwan Semiconductor (NYSE: TSM) bullish weekly trajectory. Now, we examine the daily Elliott Wave structure. This detailed view identifies the next key target and signals a potential near-term correction.

Elliott Wave analysis

TSM daily rally began at the April 2025 low of $134. Subsequently, Wave ((1)) peaked at $248. Then, Wave ((2)) corrected to $223. After that, Wave ((3)) surged to $311. Next, Wave ((4)) found support at $266. Finally, Wave ((5)) propelled prices to new all-time highs. Therefore, this five-wave sequence is now showing enough number of swings to be called completed.

However, TSM’s rally can still extend further within wave ((5)). This is contingent on price holding above the wave ((4)) low of $266. Consequently, the move higher could then target the $321 – $338 zone. This area should mark the completion of the larger wave III rally.

Once wave III completes, TSM will enter a daily wave IV correction. This pullback will unfold as a 3, 7, or 11-swing structure. Consequently, it will create another strategic buying opportunity against the $134 low. Afterwords, the stock will resume its bullish trend. Finally, this will ignite a new rally toward higher highs.

TSM daily chart 12.16.2025

Conclusion

TSM’s weekly bullish cycle remains firmly intact. Therefore, investors should continue targeting buying opportunities within daily pullbacks. Utilize our Elliott Wave strategy for precise entry timing. Specifically, establish positions after a 3, 7, or 11-swing correction completes. Additionally, our proprietary Blue Box system highlights high-probability zones with pinpoint accuracy. As a result, this disciplined method gives traders the clarity and confidence to catch the next bullish leg.