AVGO Options Signal Bullish Bias: Calls at $350–$410 Outweigh Puts as RSI 13.03 Points to Oversold Rebound

• Broadcom (AVGO) trades at $336.43, up 1.98% intraday, with RSI at 13.03—its lowest level in months.
• Options data shows call open interest (OI) dominates at $350–$410 strikes, while puts cluster at $300–$320, signaling a bullish skew.
• Bollinger Bands suggest a potential rebound toward $341.04 (middle band) after testing the $306.60 lower bound.

The confluence of oversold technicals, a bearish RSI divergence, and a call-heavy options chain points to a high-probability rebound in AVGO. Traders should focus on short-term call strategies at $350–$410 strikes and consider long-dated puts for downside protection.

OTM Options Imbalance: A Bullish Setup with Caution

The options chain for AVGO reveals a stark imbalance in open interest (OI) between out-of-the-money (OTM) calls and puts. For Friday expiration, calls at $350 (OI: 5,866) and $365 (OI: 5,712) dominate, while puts cluster at $300 (OI: 5,543) and $310 (OI: 4,193). This suggests institutional positioning for a near-term rally above $350, with heavy hedging below $300. The put/call ratio of 0.97 (put OI: 989,159 vs. call OI: 1,017,352) reinforces a mildly bullish bias, though the absence of block trades (no large institutional orders) implies retail or speculative capital is driving the skew.

For next Friday’s expiration, the bullish bias intensifies. Calls at $410 (OI: 4,232) and $375 (OI: 3,190) show aggressive positioning for a 25%+ move from current levels, while puts at $295 (OI: 2,966) and $320 (OI: 1,853) indicate limited downside conviction. This distribution suggests a “risk-on” environment, with market participants pricing in a sharp rebound ahead of earnings or macroeconomic catalysts.

Technical Divergence and Oversold Conditions

AVGO’s technical profile is a textbook setup for a rebound. The RSI at 13.03 is in extreme oversold territory, historically a precursor to short-term rallies. The MACD (-4.02) is bearish but has flattened, hinting at momentum exhaustion. Meanwhile, the 30-day moving average ($326.24) is acting as support, and the stock is trading above its 200-day MA ($244.82), confirming a long-term bullish trend.

Bollinger Bands frame the near-term outlook: a break above the $341.04 middle band could trigger a test of the $375.48 upper bound, while a close below $306.60 would confirm a bearish breakdown. Traders should monitor the $324.53 intraday low as a critical support level.

Actionable Trade Ideas: Calls at $350–$410 and Strategic Longs

1. Short-Term Call Strategy (Friday Expiration):

• AVGO 10/18 350 Call (OI: 5,866): Buy at $10.50–$11.50 for a 10–15% move. Target $350–$365 for 50–75% profit. Stop-loss at $325.
• AVGO 10/18 365 Call (OI: 5,712): Buy at $7.00–$8.00 for a 15–20% move. Target $375–$390 for 100–150% profit. Stop-loss at $330.

1. Long-Term Call Strategy (Next Friday Expiration):

• AVGO 10/25 410 Call (OI: 4,232): Buy at $5.00–$6.00 for a 20–25% move. Target $410–$430 for 100–150% profit. Stop-loss at $320.

1. Stock Long Entry:

• Entry: Buy AVGO near $306.60 (lower Bollinger Band) if it holds. Target $341.04 (middle band) as a first objective, then $375.48 (upper band). Stop-loss at $300.

1. Bearish Hedge (for Cautious Traders): Buy the AVGO 10/18 300 Put (OI: 5,543) at $5.00–$6.00 for downside protection. Target $290–$280 for 50–75% profit if the stock breaks below $306.60.

Volatility on the Horizon: Positioning for AVGO’s Rebound

The combination of oversold RSI, a bullish long-term trend, and a call-heavy options chain creates a high-conviction setup for a near-term rebound. While the $350–$410 call strikes are the most attractive for aggressive traders, conservative investors should focus on the $306.60 support level for a low-risk entry. With no material news driving the stock, technicals and options sentiment will likely dictate AVGO’s next move. Traders who position early could capitalize on a 10–20% rally before the next earnings report or macroeconomic data release.