Broadcom Jumps 3.38% On Strong Volume As Uptrend Resumes Near Yearly High

Broadcom (AVGO) gained 3.38% to close at $252.91 on June 11th, marking the second consecutive positive session for a total gain of 3.53% over two days, with strong volume supporting the advance. This recent strength follows a volatile period over the past year, including a significant stock split in mid-2024 evident in the price data drop from the $1,700s to sub-$200 in July 2024, and subsequent establishment of a clear uptrend from a multi-month low near $135.50 in September 2024. The stock currently trades near the yearly highs achieved in late May/early June.
Candlestick Theory
Broadcom's price action features notable bullish candles, culminating in the June 11th strong green body closing near the high of the session ($252.91 vs high $254.77), indicating sustained buying pressure after breaking above the $250 level. This follows a potential bullish piercing pattern formed between June 9th (bearish close near low) and June 10th (bullish open near the previous low, closing near high). Key support resides near $243.80 (June 11th low, also aligning with recent consolidation), with the swing low from the June 6th sell-off ($246.13) providing secondary support. Immediate resistance sits at $254.77 (June 11th high), followed by the yearly high near $265.43 (June 4th) and the psychological $270 level. Sustained closes above $255 would solidify bullish intent.
Moving Average Theory
Broadcom exhibits a strongly bullish configuration across key moving averages. The price currently trades decisively above the 50-day (~$243), 100-day (~$224), and 200-day (~$178) moving averages. The shorter-term 50-day MA remains above the longer-term 100-day and 200-day MAs, confirming the intermediate and long-term uptrends. The recent price dip on June 6th found firm support near the rising 50-day MA, reinforcing its role as a dynamic support level. This alignment suggests persistent upward momentum across multiple timeframes.
MACD & KDJ Indicators
The MACD (12,26,9) exhibits complex dynamics. The histogram has recently turned positive (June 10th/11th) after a prior bearish crossover and extended period below the signal line during the June pullback. This nascent positivity aligns with the price recovery but requires confirmation through a clear MACD bullish crossover for stronger conviction. The KDJ (9,3,3) presents a clearer bullish signal: the %K line (around 75) and %D line (around 65) crossed upwards solidly from oversold territory (KDJ below 20 on June 6th/9th) and are trending higher within the neutral zone, suggesting strong short-term momentum continuation potential. Both oscillators signal an exit from oversold conditions into an improving momentum phase, though the MACD lags slightly.
Bollinger Bands
Broadcom's price is currently pressing against the upper Bollinger Band (~$254-$255 based on 20-day MA ~$248 and recent volatility), signaling a position of relative strength. The bands had contracted notably following the high volatility spike around the early June sell-off (June 5th/6th wide bars), indicating a consolidation phase. The price pushing the upper band suggests increasing bullish momentum and potential for further expansion. A decisive breakout and close above the upper band would be a strong continuation signal, while a rejection could lead to a retest of the middle band ($248) support.
Volume-Price Relationship
Volume significantly validates the recent price action. The strong rally day on June 11th saw volume increase substantially (24.54M shares vs ~25.5M the prior session), confirming buyer conviction. Conversely, the sharp decline on June 6th occurred on exceptionally high volume (41.15M shares), marking capitulation/selling climax near key support ($246). The preceding uptrend phases (e.g., late April surge into May) were generally supported by increasing or robust volume. The recovery since June 6th features above-average volume, reinforcing sustainability. Continued elevated volume on up-days remains desirable for the bullish case.
Relative Strength Index (RSI)
Broadcom's 14-day RSI is calculated around 55, based on recent closes including the June 11th jump. This position indicates neutral momentum – comfortably above the oversold threshold (<30) touched briefly around June 6th/9th but still significantly below overbought territory (>70) last seen near the early June peak. The current RSI reading supports potential room for continued upward movement without immediate overbought pressures. However, a rapid ascent into the high 60s/70s would warrant caution. RSI divergence should be monitored for early reversal signs.
Fibonacci Retracement
Defining the primary uptrend from the September 2024 low (~$135.50) to the recent May/June high (~$265.43), key Fibonacci retracement levels emerge. The critical 38.2% retracement aligns with the $215.00-$218.00 zone. Price action showed strong support near this level in early May (tested ~$215.88). Notably, the recent June pullback found support firmly above the 23.6% retracement (~$241.50), reinforcing the strength of the trend. The $241-$242 zone is now confirmed as a crucial support confluence. Upside targets based on extensions include the 127.2% level near $278 and the 161.8% level near $313, though nearer-term resistance first needs to be overcome. The ability to hold above the 23.6% Fib and $241 support during weakness is a bullish characteristic.
Confluence & Conclusion
Multiple indicators align suggesting potential for continued near-term upside for Broadcom: Strong support exists at $243-$246 (candlestick low/50-DMA/Fib 23.6%/previous consolidation), reinforced by the recent successful defense of this zone. Bullish momentum signals are emerging from the KDJ and improving MACD histogram. Price pushing the upper Bollinger Band signals strength. The sustained position above all major moving averages confirms the dominant uptrend. Volume confirms the recent recovery. Key watchpoints include resistance at $255 (near upper Bollinger Band) and then $265.43, requiring sustained volume to overcome. Divergences include the MACD still needing a definitive crossover and the RSI's neutral status suggesting caution if momentum accelerates too quickly. Probabilistically, the weight of evidence leans bullish short-term, contingent on the price maintaining above the key $241-$246 support zone. Failure here would negate this near-term view, opening a deeper test towards the $215-$218 Fib support.