Broadcom INC (AVGO Stock): Price Lingers Below $890

Broadcom INC (AVGO Stock) is an american designer, developer, manufacturer and global supplier of a wide range of semiconductors and infrastructure software products.

Since March of this year, AVGO stock price has been stuck in a wide-ranging consolidation zone between $645 and $606. With the anticipation of the earnings report release, the stock price gained enough bullish momentum to rise above the support level of $645.

AVGO’s stock price then formed a support at $677.70 and then rose even higher. The chipmaker’s stock price proceeded to record a high at $921.78. The move was halted and bears entered the market to push the price below $900.

Recently, AVGO stock price established support at $790 and gained bullish momentum to fill the upper wick of the May 30 candle. At the moment, AVGO;s stock price is receiving rejection from the $889.50 level.

If bulls can push the price above the immediate resistance of $889.50, there is a higher probability for AVGO’s stock price to surge toward the $1000 level. A break and close above the $920 level is required for some sort of confirmation regarding the bullish move. On the other hand, If price falls below $840, it might decline toward the recently formed support level of $790.

Developments In Broadcom INC

In the previous year, Broadcom generated 78% of its revenue from its semiconductor sector. The semiconductor sector produces a wide range of chips for mobiles, data centers, networking, and wireless storage. The remaining 22% of the revenue came from its infrastructure software business. Broadcom is trying to expand its software business by acquiring VM software for $61 Billion.

In the fiscal year of 2022, Broadcom generated 20% of its revenue from Apple which is the largest buyer of its wireless chips. It has also signed a multi-billion dollar deal with Apple which will last for a few more years. There is a fear that Apple might replace Broadcom’s chip with its own.

Will AVGO’s Stock Price Break $889.50?

AVGO’s stock price trades above the 20,50,100 and 200-day EMAs, indicating bullish momentum in the price. The Chaikin Money Flow score is 0.01, declining from 0.40 and implying a decrease in the bullish strength and hinting at the possibility of retracement in the upcoming days.

RSI has been residing in an overbought zone since May 24, demonstrating how strong the bullish momentum is. RSI traded at 74.03, suggesting a chance of short-term pullback in the price. AVGO’s stock price traded near the upper band of bollinger which also suggests the possibility of pullback in upcoming days.

Conclusion

The market structure and price action of Broadcom stock is strongly bullish but the stock price has started to lose momentum. The technical parameters indicate a chance of possible pullback if price breaks below $840.

Technical Levels

Major support: $790 and $677.70

Major resistance: $889.50 and $920

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing