Shares of Broadcom Inc. (AVGO) continue to lose momentum within the SIA NASDAQ 100 Index Report, having fluctuated in and out of the favored zone of the report several times in the past quarter, as seen in the attached matrix position chart. These fluctuations have put SIA practitioners on high alert, especially given that the SIA Electronics & Semiconductor group is now an unfavored sector within the SIA market sector report. Technically, shares of AVGO also appear to have completed a point-and-figure (PNF) price discovery triangle (see thin black lines) on the attached PNF chart, which has been scaled at 2% for investment-grade analysis. Here, we see supply now back in control of the stock, just days ahead of its earnings report. Support on the PNF chart is now appearing at the $184.48 and $180.87 levels, with resistance at both the $216.15 and $220 levels. Beyond these tighter support and resistance levels, we have highlighted $157.45 and $134.39 on the support side, should supply continue to push prices lower and break through near-term support. On the other hand, should shares pivot to the demand side of the equation, top-level resistance is observable at the $248.29 level, a price obtained under near-perfect technical conditions when the semiconductor sector was running red hot with relative strength, and where AVGO was the "king of the castle."
The second chart is a weekly candlestick chart that shows a similar picture, with shares running out of upward momentum at the $240 level, where wicks can be observed at the top of the candles over a period of 10 weeks. Now, shares appear to have broken support at $210 (now resistance), with the next level of major support in the $180 range, and longer-term trend support visible around the $150-$160 range. Again, this is against a backdrop of negative technical attributes in the Electronics and Semiconductor sector, and a very weak SMAX score of only 1/10, which, to SIA practitioners, is a near-term measure of relative strength against a basket of other asset classes, providing yet another vector of relative strength readings.
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