Chart of the Day: Broadcom Is in a Surprisingly Nice Spot
Good support here at the $325 level should hold the stock.
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Market volatility has picked up and with it the biggest names become vulnerable to selling. In the short term, that happens to even the best names. Broadcom (AVGO) , for example, has been hit hard since reaching fresh all-time highs in early December. Back then, the stock floated higher on weak volume, which tells us the conviction level of these new buyers was low. It made this stock (and others) vulnerable to selling but now Broadcom is at a spot where buyers may be ready to step in.
No question the market volatility is rising and may give bulls a pause in adding new stock. But this $325 level for Broadcom has held on numerous occasions, so we could see some good buying come in if the market starts rising up in the days ahead. Earnings risk is not there yet for Broadcom, the company reports in early March.
The moving average convergence divergence is flat, as seen in the second pane. Momentum is poor, and money flow, at the bottom of the chart, remains weak as volume trends are bearish. Indicators are clearly in the bearish camp, and price action is as well with candles still purple/pink (bearish on the GoNoGo composite of indicators at the top).
We like Broadcom in the Pro Portfolio and rate it a Two, add on pullbacks.
The Pro Portfolio is long Broadcom.
