Broadcom May Be OverboughtBroadcom has bounced sharply from its early-April lows, but some traders may see risk of another push to the downside.
The first pattern on today’s chart is $186.90, a weekly low from mid-March. The chip stock has been trapped below that level, which may suggest old support is new resistance.
Second, prices are stalling under the 200-day simple moving average. That may indicate its long-term trend is getting less bullish.
Third, the 8-day exponential moving average (EMA) is below the 21-day EMA. That may reflect short-term bearishness.
AVGO also retraced half its drop from mid-February but climbed no further, which could confirm its direction is pointing lower.
Next, stochastics have reached an overbought condition.
Finally, AVGO is a highly active underlier in the options market, trading about 300,000 contracts per session in the last month. (It ranks 12th in the S&P 500, according to TradeStation data.) That could help traders take positions with calls and puts.
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