AVGO Options Signal Bullish Bias: Key Strikes and Trade Setups for Dec 19–26

• AVGO surges 2.1% to $336.78, trading near 30D support/resistance (339.93–341.67)
• RSI at 25.4 (oversold) but MACD (-4.64) hints at lingering bearish momentum
• Call OI edges puts 1.41M to 1.3M, with heavy call interest at $340–$370 strikes

Here’s the takeaway: Broadcom’s options market is quietly bullish, with heavy call open interest at key strikes and a technical setup that could spark a breakout. But the bearish RSI and margin concerns from earnings mean caution is still warranted.

The Pressure Points in Options: Where Bulls and Bears Are Bidding

The options chain tells a story of a market bracing for a directional move. This Friday’s top call options are clustered between $340 and $370, with the $340 strike (AVGO20251219C340) seeing 12,557 contracts of open interest. That’s not just noise—it’s a sign of buyers eyeing a short-term rebound. Meanwhile, puts at $300–$330 (like AVGO20251219P330) suggest some hedging activity, but the put/call ratio of 0.916 leans slightly bullish.

But here’s the twist: The next Friday’s options (expiring Dec 26) show a shift. The $340 call (AVGO20251226C340) jumps to 9,997 OI, while the $360 call (AVGO20251226C360) at 9,830 OI hints at longer-term positioning. This suggests smart money is betting on a bounce above $340, with a possible target near $360. The lack of block trades adds a layer of uncertainty—no big whales are moving the needle right now, so retail and institutional players are in the driver’s seat.

News and Sentiment: Why the Market Can’t Decide

Broadcom’s recent headlines are a mixed bag. Truist and UBS raised price targets to $475–$510, but the stock’s 19.4% drop from its 52-week high (to $332.72) shows investors are spooked by AI margin risks. The dividend hike to $0.65 and $73B backlog are positives, but the earnings miss on AI guidance has left a scar. Think of it like a storm cloud: the fundamentals are strong, but the near-term weather is bumpy.

This creates a unique setup. The options market is pricing in a potential rebound (thanks to the call-heavy OI), but the news flow keeps bears on edge. If the stock holds above $335, the bulls could take control. If it cracks below $330, the puts might get a workout.

Trade Ideas: Calls, Puts, and Price Levels to Watch

For options traders, the most compelling plays are:

• Bullish: Buy AVGO20251219C340 (this Friday’s $340 call) if the stock breaks above $339.93. Target: $350–$360. Risk: Price fails to hold above $335.
• Bearish: Buy AVGO20251226P330 (next Friday’s $330 put) as insurance if the stock dips again. Use it as a hedge if you’re long the stock.
• Neutral: A bull call spread with AVGO20251226C340 and AVGO20251226C360. Caps risk while targeting a 5%+ move.

For stock traders, consider:

• Entry near $335 if support holds. Target: $345 (Bollinger Middle Band at $374.69 is too far, but a 4% move is realistic). Stop-loss: $330.
• Avoid buying above $341.67 (30D resistance) unless volume surges. The RSI suggests a rebound is likely, but don’t chase a broken trend.

Volatility on the Horizon: What to Watch Next

The next 72 hours will be critical. If AVGO closes above $340 this Friday, the $360–$370 calls (expiring Dec 26) could see a surge. But if the stock dips below $330, the puts will dominate. The key is to stay nimble—this isn’t a long-term trade, it’s a short-term volatility play. And with the RSI at 25.4, the market is primed for a bounce… but don’t forget the bears are still lurking.