Chart of the Day: Broadcom's AI Slide Might Be an Opportunity
This Bullpen name is on watch, after a larger-than-expected decline.
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One could argue the huge drop in AI-related names was due, while others are starting to question the valuations of these names that have just soared higher in recent years.
Broadcom AVGO, a stock we are watching in the TheStreet Pro Portfolio Bullpen, had a monster pullback Monday to levels not seen in well over a month. In fact, the surge from earnings reported in December has nearly disappeared, though we're seeing some good support levels in the high $180 area.
The technical indicators are mostly bearish, save for the price chart, which is now neutral (candles are amber now) as we see at the top of the chart. Notice the decline in the Stochastics, as seen in the second-to-bottom pane. Momentum is pointing down, while the Moving Average Convergence Divergence indicator in the second pane, has been on a sell signal since early January.
Money flow, in the bottom pane, has been making lower-highs and lower-lows since mid-December. One could even argue a double-top has formed and confirmed with the large drop earlier this week.
We have our eyes on this name and may be looking to come around with a purchase in the near future; for now, however, we'll sit tight and let the dust settle on the AI disruptions.
At the time of publication, the Pro Portfolio had no position in any securities mentioned.
