Broadcom (AVGO) shares reached an all-time high ahead of the company’s quarterly results, due this Thursday, supported by strong fundamental drivers:
→ Partnership with Microsoft: Media reports suggest Broadcom is in talks with Microsoft to develop custom AI chips.
→ Analyst optimism: UBS called Broadcom a “top investment” in the AI sector, citing explosive demand for hardware, and raised its price target to $472.
→ Shift in strategy: Market participants believe the company is refocusing on its own chips to win AI hardware market share from Nvidia.
We highlighted additional bullish drivers in our 14 October analysis.
Following a bullish gap on 4 September, price movements have formed an upward channel (shown in blue).
From a bullish perspective:
→ the channel median is acting as support (indicated by the arrow);
→ the wide bullish candle on 24 November signals strong buying pressure;
→ the share is outperforming equity indices.
From a bearish perspective:
→ the AVGO share price is currently near the upper boundary of the channel;
→ the psychological $400 level is showing signs of resistance;
→ at peak B the price rose only slightly above the previous peak A before pulling back – a sign of a potential bull trap.
It is possible that in the coming days, AVGO may show signs of consolidation near the upper channel boundary, while the earnings release could trigger a volatility spike and a large gap, given the market’s elevated expectations.
