Chart of the Day: Broadcom Is Certainly Moving in the Right Direction
Set to report earnings this week, the big chip manufacturer tags an all-time high prior.
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Typically, shares of a company like Broadcom (AVGO) will move cautiously in front of earnings. In fact, we would not be surprised if the stock just moves sideways to lower in cautious fashion this week, but there is no disputing the strength in this name.
Broadcom is a clear leader in the semiconductor space but also represents the highly volatile cybersecurity area. TheStreet Pro Portfolio also holds the First Trust NASDAQ Cybersecurity ETF (CIBR), of which Broadcom is the top holding. Still, the company is all about chips and AI, and we’ll find out more when they report earnings after the close on June 3. We believe the company’s outlook will bring in fresh new buyers, and the stock looks ready to make a move towards $500.
The technical picture improved by Friday, with the stock closing out at an all-time high. After a furious rally in April, Broadcom took a rest, with sideways action for about a month, and then it roared higher.
The MACD looks to be headed for a buy signal crossover this week, money flow is improving and relative strength is solid. That latter fact is saying a lot considering the power in the overall market.
We like Broadcom in TheStreet Pro Portfolio and rate it a Two, or “stockpile on pullbacks.” That pullback may come following earnings but it may not be for long. The best-trending stocks, such as AVGO, do not give you a good chance to get on board.
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At the time for publication, TheStreet Pro Portfolio was long AVGO and CIBR.
