AVGO Options Signal $420 Bullish Battle: How Traders Can Position for Earnings Volatility

• AVGO plunges 2.9% to $400.88 as RSI nears overbought 72, hinting at potential rebound
• Options data shows 1.04 put/call OI ratio, with heavy call OI at $420 and put OI at $300
• Earnings on Thursday could trigger $6.2B AI segment spotlight, per Wall Street forecasts

The stock is dancing on a tightrope between $394 support and $420 resistance, with options data screaming for a breakout. Here’s what you need to know: if Broadcom’s AI-driven earnings report cracks expectations, the $420 level could become a springboard to $440. But if the stock stumbles below $394, the $300 puts might ignite a bearish stampede. Let’s break it down.The $420 Call Wall and the $300 Put Fortress

Options market makers are hedging both ways. This Friday’s $420 call (AVGO20251212C420) has 5,865 open contracts—nearly double the $410 call. That’s a classic “bull trap” setup: big OI at a strike just above current price means heavy profit-taking pressure if AVGO approaches it. Meanwhile, next Friday’s $300 put (AVGO20251219P300) dominates with 9,958 OI, suggesting institutional players are bracing for a 25% drop. The irony? The 200-day moving average sits at $338, so a $300 close would trigger a rare bearish signal. But here’s the twist: block trading is silent, so no whale-sized bets to skew the odds.

Earnings as the Wild Card

Rosenblatt’s $440 price target and HSBC’s $535 call hinge on AI semiconductor demand. But the stock’s 42x forward P/E is a ticking clock. If AVGO beats the $1.87 EPS estimate and guides higher for 2026, the $420 calls could become fire starters. However, the “sell the news” risk looms—its 180% YTD rally has skeptics eyeing a correction. The quantum-safe SAN switch launch and VMware partnerships add narrative fuel, but they’re background noise if earnings miss by 5%.

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

For the bullish: Buy AVGO20251219C410 (next Friday’s $410 call) if the stock holds above $394. Why? The 30-day support at $339.98 is a long shot, but a rebound off $394 could trigger a rally toward $420. Target: $430 (3.8% gain) if earnings pop. Stop: Below $380.

For the bearish: Buy AVGO20251219P300 if AVGO breaks $394. The $300 put’s 9,958 OI suggests a liquidity magnet at that level. Target: $280 (25% drop) if AI hype fizzles. Stop: Above $322 (lower Bollinger Band).

For the stock: Consider entry near $394 if support holds, with a target at $420. A break below $380 forces a reevaluation—this stock doesn’t like to trade below its 30-day MA of $369.55 for long.

Volatility on the Horizon

Thursday’s earnings report isn’t just a number game—it’s a psychological battleground. The $420 level isn’t just a price; it’s a symbol of whether AI optimism can justify AVGO’s premium valuation. If the stock gaps up post-earnings, the $450 calls (AVGO20251219C450) could become the new battleground. But if the $394 support crumbles, watch the $350 puts (AVGO20251219P350) with 7,053 OI turn into a stampede. Either way, this week’s options setup is a masterclass in positioning for binary outcomes.