AVGO Options Signal Bullish Bias: Key Strikes and Strategies for Q1 2026 Volatility

• AVGO trades at $339.91, clinging to a 0.03% gain amid a short-term bearish Kline pattern and long-term range-bound action.
• Options data shows heavy call open interest at $370 and $380, with puts clustering at $300 and $310—hinting at a potential breakout or hedge.
• RSI at 37.5 and Bollinger Bands suggest oversold conditions, but 30D support at $339.81 is critical to hold.

Broadcom’s options market is whispering a story of cautious optimism. Calls at $370 and $380 (expiring this Friday) dominate open interest, while puts at $300 and $310 hint at downside protection. The stock isn’t screaming bullish or bearish—it’s positioning for a move, and the data tells us where to lean.

What the Options Map Reveals About Market Sentiment

The OTM call-heavy profile—especially at $370 (OI: 19,056) and $380 (OI: 14,254)—suggests investors are pricing in a rebound above $340. These strikes align with the upper end of the 30D support/resistance range ($339.81–$341.27), making them psychological hurdles. Meanwhile, puts at $300 (OI: 14,216) and $310 (OI: 13,089) act as a safety net for a deeper correction. The near-even put/call ratio (0.978) means no overwhelming fear or greed—just positioning for volatility.

No block trades are skewing the data, so this is organic. The takeaway? A breakout above $341.27 could trigger call buyers to push toward $370, while a breakdown below $335.06 might see puts at $300 tested. The key is volume: today’s 12.8M shares traded suggest momentum is thin, but RSI near oversold levels could spark a bounce.

News and Options: A Tale of Two Margins

Broadcom’s recent 11% post-earnings drop—despite record revenue—has investors fixated on margin compression. CEO Hock Tan’s warning about AI’s lower-margin drag has rattled nerves, even as Q1 2026 AI revenue is forecasted to double. The market is torn: AI’s long-term potential is undeniable, but near-term margin fears are real. This explains the options setup—calls at $370+ price in for a recovery, while puts at $300+ hedge against a margin-driven selloff.

The $1.6T valuation debate also matters. Analysts are split: some see a 34x forward P/E as rich, others argue AI’s secular growth justifies it. This duality is baked into the options chain—bulls and bears are both hedging, not all-in. The stock’s 17% drop from its 52-week high has created a buying opportunity for long-term believers, but short-term volatility remains a risk.

Actionable Trades: Calls, Puts, and Price Levels

For options traders, the most compelling plays are:

• AVGO20251219C370 (this Friday): If AVGO breaks $341.27, this call could catch a rebound toward $370. Breakeven is ~$370.50; target $380 if momentum holds.
• AVGO20251226C380 (next Friday): A longer-term play if the stock consolidates above $339.81. Entry near $339.91 with a stop below $335.06.
• AVGO20251219P330 (this Friday): A hedge if the stock dips toward Bollinger Bands’ lower bound ($326.39). Breakeven ~$330.50; target $339.81 if support holds.

For stock traders, consider:

• Entry near $339.81 (30D support) with a target at $347.50 (intraday high). Stop-loss below $335.06.
• Short-term fade if the stock rallies above $347.50—sell into strength with a target at $339.81, as overbought conditions may trigger profit-taking.

Volatility on the Horizon: Bulls, Bears, and the AI Tightrope

Broadcom is walking a tightrope. The options market is pricing in a Q1 2026 battle between AI’s growth potential and margin pressures. If the stock holds above $339.81, bulls could reclaim $347.50 and test the $370–$380 call-heavy zone. A breakdown below $335.06, however, risks a test of the Bollinger Bands’ lower bound. The 30D MA at $368.68 is a distant target, but it’s a stretch without a catalyst.

The bottom line? This isn’t a “buy and hold” moment—it’s a positioning moment. The options data and technicals suggest a high-probability range trade with defined risks. For those with a longer-term view, AVGO’s AI-driven revenue surge could justify the current valuation. But for now, the stock is dancing on a knife’s edge. Stay nimble, and let the data guide your next move.