hufftrade

Cup and Handle Pattern Nearly Complete

Long
hufftrade Updated   
BATS:AVGO   Broadcom Inc.
I wrote about this in another post, but the chart is easier to see in this one.

The cup and handle pattern on AVGO looks nearly complete on the hourly. Looking at the fib retracement, the bottom of the cup bounces nicely off of the 0.5 line, bouncing off of resistance at the 0.786, and the handle seems to be making it's way back up today.

If we can get past the $1750 price at the 0.786, with the AI narrative and stock split ahead, I see a potential move up to $2,200 on momentum. The market is certainly due for a correction at some point, but I don't see it happening until later this year.

Time will tell, and we'll just have to wait and see what happens.
Comment:
Already seeing a big momentum push up against that $1750 level. Let's see if it breaks through. After that I'm not seeing much resistance until the psychological $1800, and then $1870 after that.
Comment:
Definitely seeing the expected fight for the $1750 level, but once that's established, I wouldn't be surprised if the bulls take this and run with it.
Comment:
So far we've retraced 50% from the run up this morning and are sitting on that support at $1730.

It looks like the bulls weren't ready to break through $1750, but perhaps the last 30 minutes of the session will prove to be interesting. Either way, I still maintain that the week ahead could show some big upside ahead of the split.
Comment:
Markets are more volatile today, likely because of the Powell testimony. AVGO still is holding support above $1730, so hopefully we'll see a return above $1750 into the afternoon session.
Comment:
Definitely a fun day to HODL this one - aside from the descent down to $1705, the bulls were able to reclaim $1730 before the session close.

On the hourly, it looks like the breakout failed due to some resistance coming from a macro trend line descending from the peak of the last run at the end of June. However, zooming out further, I'm seeing support coming from an ascending macro trend line, forming a bull pennant when you put them all together.

If this is the case, we may see a return back to $1700 if bulls can't break through the top trend line, but I would expect a bounce up towards new ATH after that.

Aside from the chart: the split, news of several big name holders, and the AI narrative seem to be very positive. This is only my opinion. No one has a crystal ball, but things seem bullish. I'm still long on this trade.
Comment:
Price is touching the $1750 level and meeting some resistance from an ascending parallel channel that started forming yesterday, as well as the macro descending trend line.

If price breaks through, we could start to approach yesterday's highs, otherwise I anticipate price to retrace back to $1733 before bouncing back up if the channel is maintained.
Comment:
Price has broken through and is holding just above the top of the ascending parallel channel for the moment. If it can break through resistance at $1765 in the afternoon session, then hopefully the bulls will take it higher towards $1800.

Otherwise this might still fail and drop down to the bottom of the parallel channel. That said, the momentum seems to be picking up again. As always, wait and see.
Comment:
Meeting some expected resistance at the $1765 level on the shorter time frames, but it seems to be using the top of the parallel channel as support now, so we could still see a push above $1765.
Comment:
Looks like $1765 was a little too much for the bulls to break through today. Overall the stock continues to head in a positive direction. I wouldn't be surprised if we see a bounce off the bottom channel and then start back upwards tomorrow ahead of the Friday split.
Comment:
Seems a little violent today, but looking at the chart, there is still support at the macro ascending trend line that we haven't tested yet around $1680. Possible we see some further downside before a bounce back up.

I'm still long on the stock, but I've de-risked some of my options positions for now waiting to see which direction we go.
Comment:
Starting to make our way down to the $1680 level. Hopefully we'll see a bounce. The daily chart is showing a very nice bull pennant forming if we head back up after this.
Comment:
So far seeing that bounce hold above $1680. It's anyone's guess at this point if it holds, but it seems to be respecting support for the moment. Hopefully we'll see a continuation upwards now.
Comment:
Not much to say here. I'm writing this in the final minutes of today's session, and AVGO is still holding support above the macro trend line, but a break below $1688 could have us diving further. Hopefully we'll see another bounce and momentum upwards next week.

Stock splits have the potential to generate 25% gains over the following 12 months, but combined with other macro-economic factors here, it's possible the rotation out of big tech continues, driving prices down further. I'm still long on the stock for the long haul, but it remains to be seen where price moves in the short term.
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