It has been a rough month for stocks overall, but Broadcom (BRCM) is bucking the selling pressure and challenging resistance. There are two bullish continuation patterns possible on this chart. First, an inverse head-and-shoulders pattern extends back to early March. Second, the right two-thirds of the pattern looks like a cup-with-handle, which is a bullish continuation pattern. This pattern was popularized by William O'Neal of IBD. The stock is also showing relative strength as the BRCM:$SPX ratio hit a new high today. A break above the red resistance zone would signal a continuation of the bigger uptrend and project a move to around 50.
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About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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