Broadcom’s Charts Don’t Offer Much Comfort Ahead of Earnings

Broadcom (AVGO) shares are edging lower in pre-market trading here on Thursday ahead of the chipmaker’s third-quarter results after the closing bell. Broadcom is expected to post eanrings of $9.56 per share on revenues of $8.37 billion, but I am more interested in the charts and indicators this morning.

In this daily bar chart of AVGO, below, we can see that prices have largely been on defense since late December. Bounces to the upside have been trading affairs. AVGO is trading below the cresting 200-day moving average line and below the declining 50-day moving average line. The slope of the On-Balance-Volume (OBV) line has been negative since December. The Moving Average Convergence Divergence (MACD) oscillator is pointed down and close to the zero line and a potential sell signal.

In this weekly Japanese candlestick chart of AVGO, below, we can see that prices have broken a longer-term uptrend and trade below the declining 40-week moving average line. The weekly OBV line topped in March. The MACD oscillator is below the zero line and struggling.

In this daily Point and Figure chart of AVGO, below, we can see a downside price target in the $486 area.

In this weekly Point and Figure chart of AVGO, below, we used close-only price data. Here the software yields a price target in the $400 area.

Bottom line strategy: I have no knowledge about what AVGO is going to tell shareholders this evening, but I get no comfort from the charts and indicators. I would avoid the long side of AVGO.