In This Article:
Key Takeaways
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Broadcom shares fell to a one-month low Thursday amid a broader chip stock selloff as investors digested Nvidia's earnings and President Trump's latest announcement on tariffs.
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Selling in the stock from the top trendline of a descending channel has accelerated, with the price falling below the respected 50-day moving average on increasing trading volume.
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Investors should watch major support levels on Broadcom's chart around $185, $160, and $140, while also monitoring key overhead areas near $230 and $295.
Broadcom (AVGO) shares may remain on watchlists after falling 7% to a one-month low Thursday amid a broader chip stock selloff as investors digested earnings from Nvidia (NVDA) and President Trump's latest announcement on tariffs.
The market's response to Nvidia’s results suggests that while the AI favorite's earnings came in ahead of Street expectations, investors may have been looking for more, given mounting concerns over AI spending and uncertainty about the potential impact of the Trump administration’s policies relating to tariffs and AI chip export curbs.
Broadcom shares have lost about 15% of their value since the start of the year through Thursday’s close, but have gained more than 50% over the past 12 months as demand for its chips to support AI surged, with Bernstein analysts suggesting in December that the chipmaker could be having its “Nvidia moment.”
Below, we take a closer look at Broadcom’s chart and use technical analysis to point out key price levels worth watching out for.
Descending Channel Takes Shape
Since setting a new all-time high (ATH) in mid-December, Broadcom shares have consolidated within a descending channel. More recently, selling from the pattern’s top trendline has accelerated, with the price falling below the respected 50-day moving average (MA) on increasing trading volume.
While the relative strength index (RSI) confirms bearish momentum with a reading below 40, the indicator sits at a level that often coincides with local bottoms in the stock.
Below, we identify three support levels that could be worth watching if the shares continue to fall and key overhead areas to monitor if the stock resumes its longer-term move higher.
Major Support Levels to Watch
The first lower level in play sits around $185. This area, currently positioned just below the descending channel, could find support near the top trendline of a prior ascending triangle on the chart and the nearby 200-day MA.
A decisive close below this price could see the shares decline to the $160 level, a location that may provide a floor near several troughs that formed on the chart in June and November last year.