Stock of the day: Broadcom

Today we’ll look at Broadcom again, a stock which we first analysed in mid-May. Back then, the price was inside a symmetric triangle and we said what we always say that when it’s inside a triangle, a breakout will show you the direction:

“You know the drill, they way how you trade triangles is to wait for the breakout from it. Breakout of its lower line, will be a signal to sell and it should not be a surprise if that will happen”

A few days later, indeed the price went lower and broke the triangle’s support. A few weeks later the price is approximately 80 USD lower, not bad. For the past few days, the price is stuck inside a tight range between the red dynamic resistance and the horizontal support at 492 USD.

If the price breaks the green support and closes the day below it, it will bring us a sell signal. On the other hand, if the price comes back above the red area, it can bring us a slight relief and a mid-term buy signal. As for now, the first scenario seems more likely to happen.