Don't Ignore This Chart!

BroadCom Gets a Squeeze and Makes a Move $BRCM


BroadCom looks set to continue its long-term uptrend with a breakout and fresh 52-week high. The chart shows BroadCom (AVGO) with Bollinger Bands, the Bandwidth indicator and the Percentage Price Oscillator (PPO). First, notice that the stock hit a 52-week high in July and the PPO(50,200,0) has been above zero all year, which means the 50-day EMA is above the 200-day EMA. The long-term trend is clearly up and this means our trading bias should be bullish. In other words, we should expect bullish resolutions to short-term setups.  

The pink area on the price chart shows Bollinger Bands narrowing from August to October as volatility contracted, which is typical for a trading range. The green vertical lines show BandWidth dipping below 5% four times over the past year. These dips tell us that volatility was at the low end of the 12 month range. The January and April dips preceded big advances in the stock, but the August dip was a dud. The fourth dip occurred last week and the two day breakout suggests that prices are headed higher in the coming weeks or months. 

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--Arthur Hill CMT

Plan your Trade and Trade your Plan

Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at 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. Learn More
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