Today, April 27, Taiwan Semiconductor Manufacturing, the largest manufacturer of chips for other chip companies including Apple (AAPL) and Intel (INTC), reported first quarter earnings 10.1% above Wall Street expectations. Earnings of $1.07 billion were the highest since the fourth quarter of 2007.

The company said it expects momentum to continue in the second quarter with sales forecast to rise 8.7% to 10.9% from the level of the first quarter. That would push revenue to a company record for a quarter. Gross margin will climb to 48% to 50% in the second quarter from 47.9% in the first quarter, the company projects.

Ordinarily that kind of upside guidance would lead me to increase my target price for a stock. But while as a company Taiwan Semiconductor may be cooking, Taiwan Semiconductor the stock (or actually ADR, American Depositary Receipt,) has a problem that makes me reluctant to raise my target price above the $12.50 a share that I set on January 29.

Look at a long-term chart of the Taiwan Semiconductor ADR and the problem just about reaches out to grab you by the throat. The last time this ADR was above $12.50 was way back in March 2002 when it hit $14.

Both before that—from October in 2000, the year of the technology stock crash—to April 2010, the stock has traded in a range below $12.50. That’s created huge resistance at $12 or so that the stock needs to overcome to move significantly higher. That resistance is made up of all the people who bought at prices up to $12 or so and who would be more than willing to sell out at that price to break even or to show a slight profit.

Getting through this kind of multiyear price ceiling can take years. And I’m reluctant to make that kind of time commitment for Jubak’s Picks for any technology stock. The sector is just too volatile. So I’m leaving my target price at $12.50 by May 2010. That’s still roughly 17% above the stock’s price on April 27.

Full disclosure: I own shares of Taiwan Semiconductor in my personal portfolio.