Broadcom (BRCM) is major semiconductor company with ties to major “wired and wireless” companies like Apple. After raising guidance and announcing a massive stock buyback, Broadcom rose to multi-year highs, but it has come off that level by about 5%. We have done well with this name in the past, and according to the chart pattern, the stock may be setting up for a move higher.
Intel (INTC) came in with some decent numbers last week but the stock did not move much. I bring them up, because Intel is a leading indicator for other names in the industry, like Skyworks, Qualcomm and Broadcom. We still have more earnings to come from this group, but it appears they are poised for some nice gains. The Broadcom chart shows a nice pullback amid lower volume, signaling less commitment by sellers. The MACD is about to flash a buy signal, but it needs a few more days before it confirms.
On a broader scale, it looks like we have a very deep cup/handle pattern; a move over the $44 area has this one ready to move up toward the $50 mark. We are long Feb $42 calls.
Background on Broadcom:
Broadcom Corporation provides semiconductor solutions for wired and wireless communications. Its products offer voice, video, data, and multimedia connectivity in the home, office, and mobile environments.
The company operates in three segments:
Broadband Communications offers cable, satellite, IP, and terrestrial set-top boxes that enable service providers to deploy a range of features and services for consumers; DSL, cable, and fiber broadband access services; and wireless infrastructure solutions.
Mobile and Wireless provides low-power, high-performance, and highly integrated solutions, including Wi-Fi and bluetooth, near field communications, wireless connectivity combo chips, and cellular SoCs, as well as location-based technologies and touch controllers.
Broadcom Corporation was founded in 1991 and is headquartered in Irvine, California.
