Broadcom delivered strong earnings and appears to be cranking back into a rally to set higher highs as it goes forward. The Bollinger Bands have tightened up and the price action is bumping right up against the top band indicating a rally picking up steam. MACD confirms this breaking bullish again with ADX showing a strong uptrend with DM+ crossing upward...
Broadcom is the maybe not as enticing as NVDA or AMD, but it should be. Broadcom invests heavily in diversification and acquisition so it is not dependent on certain revenue streams. It is also in the middle of a massive buyback program which places a floor under the stock.
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Despite the earnings pop, as long as it doesn't close above 296.40, the deep crab is still valid. Hit the .382 target once already, looking for it to fall out of that red triangle to start another short. Shorted it at 299 Friday but probably took profit too quickly. Target 265.
The overall structure is a ABC correction up
Within C we have 5 other waves
The 5th wave is either going to end at the 2: or 2.272, trend based fib extension, which makes 269-270 a very good short opportunity. (Within the red box)
Got a weekly reversal off a deep crab that goes all the way back to the Oct crash. Daily 21DEMA already rolling over so PT1 seems pretty solid. PT2 requires a purge in broader markets or earnings disaster. Medium term short due to market's gravity defying nature and overall scope of the pattern.
AVGO looks quite over extended here and it appears buyers are losing steam. Adding this to my short list. Overall market should retrace soon and AVGO should join.
Moving in a decline channel, but if broke this resistance line 0,786 FIBO, next wave up will aggressive. Look at the breakout of the $269 and buy for profit!
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NASDAQ:AVGO
