AVGO Options Signal $350 Bullish Battle: How to Play AI Chip Giant’s Volatility

• Broadcom (AVGO) trades at $339.16, down 0.67% amid a short-term bearish trend but sits near key 30D support/resistance levels ($339.93–$341.67).
• Options market shows heavy call open interest at $350 and $360 for Friday expiration, while puts dominate at $330 and $310—hinting at a potential price tug-of-war.
• RSI at 35.5 and MACD divergence suggest oversold conditions, but CEO Tan’s $42M stock sale adds caution.

Here’s the takeaway: AVGO is caught in a tight squeeze between AI-driven optimism and near-term profit-taking pressure. The stock’s 0.7% drop today mirrors a broader consolidation phase, but options data and technicals point to a critical inflection point ahead. Let’s break it down.

The $350 Call Wall and Bear Put Fortresses

Options traders are betting on both sides of the fence. For this Friday’s expiration, AVGO20251226C350 and AVGO20251226C360 have 12,447 and 10,363 open contracts—suggesting a belief that AVGO could rally above $350. Meanwhile, puts like AVGO20251226P330 (11,795 OI) and AVGO20251226P310 (9,757 OI) indicate hedging against a drop below $330. The near-even put/call ratio (0.975) shows no clear bias, but the concentration of calls at $350+ implies a psychological threshold to watch.

AI Profits vs. CEO’s Exit Play

Broadcom’s recent headlines are a mixed bag. The $63.9B revenue and $23.1B net income driven by AI semiconductors are stellar. Yet CEO Tan’s $42.3M stock sale—while personal—coincides with a 28% Q4 revenue jump. Investors might split: bulls see AI demand as a tailwind, bears wonder if Tan’s move signals profit-taking. The $73B AI backlog and UBS’s $475 price target (up 10% from current price) tilt the narrative bullish, but the stock’s 200D moving average ($284.36) remains a distant floor.

Trade Ideas: Calls for the Brave, Puts for the Cautious

For options traders:

• Bullish Play: Buy AVGO20251226C350 (strike price $350) if AVGO breaks above $341.67 (30D resistance). The RSI’s oversold reading and Bollinger Bands’ lower-bound position ($317.66) suggest a rebound could target $350–$360.
• Bearish Hedge: A put spread with AVGO20251226P330 and AVGO20251226P310 could profit if AVGO dips below $338.70 (intraday low).

For stock traders:

• Entry near $338.30 (200D support zone) with a stop-loss below $335.50. A breakout above $343.63 (200D resistance) would validate the bullish case.
• Alternative: Sell covered calls at $350 for Friday expiration if holding the stock, capitalizing on the high call demand.

Volatility on the Horizon

AVGO’s dance between AI euphoria and near-term profit-taking isn’t ending soon. The next Friday’s options (expiring Jan 2) show even higher call strikes like AVGO20260102C400 (4,102 OI), hinting at long-term bullish bets. But don’t ignore the puts: AVGO20260102P300 (7,330 OI) suggests a 10% downside risk if sentiment shifts.

Bottom line: AVGO is a high-stakes chess game. The AI story is intact, but technicals and options data warn of a bumpy path. Play it smart—use options to define your risk, and keep an eye on that $350 level. It might just be the line between a breakout and a breakdown.