AVGO Options Signal $340 Put Defense: Bullish Breakout or Bearish Trap?

• AVGO trades at $349.27, down 0.17% with volume surging to 7.36M shares.
• Put/call open interest ratio stands at 1.04, with heavy bearish positioning at $340 and $315 strikes.
• RSI at 27.59 suggests oversold conditions, but MACD (-5.89) hints at fading momentum.

Here’s the thing: AVGO’s options market is locked in a tug-of-war between cautious bears and hopeful bulls. The data screams defensive positioning—but whether that sets up a rebound or a breakdown depends on where the stock tests its support zones today.

The $340 Put Wall and $370 Call Ceiling

Let’s unpack the options data first. For this Friday’s expirations, puts at $340 (OI: 8,146) and $300 (OI: 7,994) dominate, while calls peak at $360 (OI: 10,183) and $370 (OI: 7,007). Next week’s contracts amplify the bearish bias: $315 puts (OI: 4,600) and $210 puts (OI: 3,113) suggest deep downside expectations.

But here’s the twist: The 30-day support zone (339.93–341.67) lines up almost perfectly with the $340 put wall. That’s not a coincidence. Options buyers are hedging against a potential breakdown, but the RSI’s oversold reading and Bollinger Band positioning (price near the 308.92 lower band) hint at a possible bounce.

The real risk? If AVGO closes below $341.67 today, that could trigger a cascade of stop-loss orders and validate the bearish puts. Conversely, a rebound above $349.87 (intraday high) might reignite the long-term bullish trend.

News vs. Options: A Mixed Bag

Broadcom’s story is a classic case of growth vs. margin pressures. The recent $34.5M CEO sale and Q4 guidance concerns have spooked Wall Street, yet analysts keep raising price targets to $475–$510. The dividend hike and AI infrastructure tailwinds (especially NVIDIA’s Groq deal) add complexity.

Here’s what’s interesting: Institutional buyers like LeConte Wealth Management are piling in, but insiders have sold $239M in the last 90 days. That’s a red flag for some, but others argue it’s routine RSU tax management. The key takeaway? The stock’s fundamentals remain strong, but near-term volatility is baked in.

Trade Ideas: Precision Entries for Bulls and Bears

For options traders, the most compelling setup is a bull call spread using AVGO20260102C350 and AVGO20260102C370. Why? The $350 strike is just below the current price, offering a 4.5% buffer for a rebound, while the $370 call caps gains if the stock breaks out. With 9 days to expiration, time decay works in your favor if AVGO holds above $345.

Stock traders should consider scaling into long positions near $345 (the 30-day support level) with a tight stop at $341.67. A break above $349.87 could target $360–$365, aligning with the call open interest sweet spot. For bears, the $315 put (AVGO20260109P315) offers a high-risk, high-reward bet if the stock gaps down tomorrow.

Volatility on the Horizon

The next 48 hours will be critical. If AVGO holds above $341.67, the RSI’s oversold bounce and Bollinger Band squeeze could fuel a short-term rally. But a close below $338.30 (200D support) would validate the bearish puts and force a reevaluation of the long-term trend.

Either way, the options market has already priced in this volatility. Your job? Stay nimble. Watch the $340–$345 range like a hawk. This is where the battle for AVGO’s near-term direction will be decided.