Hey good morning everyone. Happy Wednesday. It’s July 22. Great to be with all of you. It’s time for our chart of the week. And this week we’re gonna focus in on big chip name Broadcom; AVGO is the symbol. Let’s take a look at this one.
So as many of you know, over the past month, six weeks, some of these semiconductor stocks have really been taking it on the chin. Broadcom certainly one of the casualties of the selling that’s happening in the semiconductor group.
But I feel that this stock has pretty much made its move down. They don’t have earnings coming out until September, early part of September.
And you can see that the stock made a huge move into the last earnings print, which was in June, and then came back down hard.
Stock made an enormous move from the end of March from about $270 up to about $490.
Now if we put a Fibonacci retracement on that – let’s take a look at that here – we can see that the stock came down to right around the 38% retracement level, which is right around here. And then it stopped going down. So that would be a good marker for this stock to bounce. Let’s call it about $368 or so, and it came down there about four or five times in the past couple of weeks from the end of June to this last week.
And it’s not pretty, that’s for sure. But it’s certainly something worthy of maybe a buy right here.
We see a little bit better relative strength in the stock.
We see a good, a better improvement in the MACD as well.
Volume trends have started to decline, which is what you like see when a stock kind of goes sideways here.
The only caveat here is that you like to see a consolidation in a higher part of the chart. It’s not quite there.
But if you branched out to say the weekly chart, if we were looking at longer term moves for the stock, you would see that the stock chart still remains bullish.
But I don’t know if it’s going to get back up these highs and fill in these gaps anytime soon. We’ve got one gap here, we’ve got one gap over here, and a few little minor gaps over here.
But I do think that certainly the 61.8% retracement level, which is about $417, is certainly doable. That would be about a little more than a 9% move, 9 1/2% move from current levels. So I think that this one has got some room over there.
If it just remains sideways you could trade that sideways range. If it gets above that $420, well then you’ve got something to work with for some more upside.
So take a look at Broadcom, AVGO.
Thanks so much for watching everyone and I’ll see you guys next time.
