Taiwan Semiconductor

Sometimes the simplest patterns are the ones worth heeding the most. Case in point: the broken uptrend in Taiwan Semiconductor ( TSM). You don't have to be an expert technical analyst to figure out what's going on in TSM -- this stock had been trading within an uptrending channel, but the channel broke back in February.

Trend channels are useful for traders because they identify the high-probability range for shares to keep moving within. Once shares move outside the channel, it's an early warning that the direction of the trend is changing. That's exactly what's happening in TSM right now; shares broke down through trendline support, and after staging a pullback to re-affirm newfound resistance at the bottom of the channel, shares started trading within a downtrending channel.

Now, it makes sense to be a seller in TSM if you're not already. This stock could have a lot more room to run lower in 2013. Worse, it could end up like the next name on our list.

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