AVGO Options Signal $350 Call Contention as Bearish RSI 26.15 and China AI Fears Test $322.87 Support

• Current price: $327.62 (down 0.5% from open)
• RSI at 26.15 (oversold territory)
• Put/Call OI ratio: 0.94 (calls edge out puts)

The market is at a crossroads for Broadcom. Options data hints at a $350 call wall of worry, while technicals scream caution. Let’s break down what this means for traders today.

Bearish Engulfing Pattern Meets Call OI Clusters

The candlestick chart shows a textbook bearish engulfing pattern—price opened at $335.74 and closed near the session low. But here’s the twist: call options at $350 ($AVGO20251219C350) and $330 ($AVGO20251219C330) have 23,835 and 20,723 open interests respectively. This isn’t just bearish—it’s a tug-of-war. Big money is hedging for a rebound to $350, but the RSI at 26.15 and MACD histogram at -7.98 suggest sellers still control the short-term narrative. The $310 put ($AVGO20251219P310) with 17,355 OI acts as a dark cloud: if price breaks below $322.87 (lower Bollinger Band), this strike could see a rush.

China AI News Amplifies Margin Fears

Recent headlines about Chinese EUV lithography breakthroughs and Broadcom’s own margin warnings have investors spooked. The stock’s 5.4% drop yesterday wasn’t just about numbers—it was about fear of the future. But here’s the catch: Morgan Stanley’s $462 price target and GMO’s bullish take on AVGO’s diversified AI-software model suggest long-term buyers see value in the chaos. The question is whether the market will price in these fundamentals before the $350 calls expire Friday.

Trade Setup: Play the Rebound or Hedge the Breakdown

For options traders:

• Bullish Play: Buy $AVGO20251219C330 calls if price holds above $326.85 (intraday low). Target $341.67 (30D resistance) with a stop below $322.87.
• Bearish Play: Buy $AVGO20251219P310 puts if price breaks $326.85. Target $310 with a stop above $339.93.

For stock traders:

• Entry near $322.87 (lower Bollinger Band) with a target at $339.93 (30D support/resistance zone). A break below $322.87 invalidates the setup.

Volatility on the Horizon

This week’s options expirations (Dec 19 and 26) will test AVGO’s resolve. The $350 call wall could create a false bounce, but the RSI’s oversold reading suggests a rebound attempt is likely. However, China’s semiconductor advancements and Oracle’s funding uncertainty mean the road ahead isn’t smooth. Traders should treat this as a short-term trade—positioned for a $322.87–$341.67 range battle—with eyes on next week’s options for extended setups.

The bottom line? AVGO is caught between AI optimism and margin realism. For now, the $350 call wall and $310 put floor define the battlefield. Play it like a chess game: one misstep and the whole board shifts.