Broadcom (AVGO) surges 9.88% as technical indicators signal bullish momentum and key support levels.

Broadcom (AVGO) surged 9.88% in the most recent session, closing at $356.7, with volume spiking to 45.98 million shares. The stock has exhibited a volatile yet generally upward trajectory over the past year, punctuated by sharp corrections and rapid rallies, particularly in late September and early October 2025. This analysis will dissect key technical signals to assess the stock’s current positioning and potential near-term dynamics.

Candlestick Theory

Recent price action reveals a strong bullish bias. The most recent session’s candlestick—a long white real body with a near-absent lower shadow—signals aggressive buying pressure, reinforcing a potential breakout from prior resistance around $324.63. Key support levels are identified at $324.63 (prior close of October 10) and $306.1 (September 30), while resistance clusters at $356.7 (current close) and $364.09 (September 15 high). A bullish "engulfing" pattern emerged on October 13, suggesting a short-term reversal from the October 10 selloff. However, the absence of a confirmed breakout above $364.09 raises caution about overextending long positions without confirmation.

Moving Average Theory

Short-term momentum is robust, with the 50-day MA (approximately $340–$345) and 100-day MA ($330–$335) both trending upward and currently acting as dynamic supports. The 200-day MA ($310–$315) provides a critical long-term floor. The price has closed above the 50-day MA for 10 consecutive sessions, confirming a medium-term uptrend. However, the 50-day MA is approaching convergence with the 100-day MA, which may signal a potential slowdown in acceleration. A crossover of the 50-day MA below the 100-day MA would invalidate the bullish case, though current data does not indicate this.

MACD & KDJ Indicators

The MACD histogram has shown positive divergence in the past two weeks, with the MACD line ($10–$15) rising above the signal line ($5–$10), suggesting strengthening bullish momentum. The KDJ stochastic oscillator, however, is currently in overbought territory (K=85, D=75), with a potential bearish divergence in the %K line. This highlights a risk of short-term profit-taking. The RSI (discussed below) corroborates overbought conditions, but the MACD’s positive momentum suggests the trend may persist despite the overbought signal, at least in the short term.

Bollinger Bands

Volatility has spiked, with the bands expanding to a width of approximately $14 (from $343.52 to $359.38 on October 13). The price is currently near the upper band, indicating heightened volatility and a potential consolidation phase. A pullback toward the middle band ($351.6) or lower band ($343.52) could signal a temporary pause in the uptrend. However, the rapid expansion of the bands suggests that a continuation of the trend—albeit with increased oscillation—is more probable than a reversal.

Volume-Price Relationship

Volume has surged during key up moves, particularly on October 13, where volume was 45.98 million shares, compared to an average of 25–30 million. This validates the strength of the recent rally. However, volume has declined slightly on the most recent sessions following the October 13 surge, which may indicate waning momentum. A sustained increase in volume on a pullback would strengthen the case for a continuation of the uptrend, while a volume contraction would raise concerns about distribution.

Relative Strength Index (RSI)

The RSI is currently at 70–75, indicating overbought conditions. Historical data from 2022 to 2025 shows that AVGO often experiences gains in the 3–30 day window after an RSI overbought signal, with a 73.53% win rate over 30 days. However, the RSI’s prolonged overbought status (multiple sessions above 70) suggests a potential for a correction or consolidation phase. Traders should monitor for a bearish divergence between price and the RSI to signal a reversal.

Fibonacci Retracement

Key Fibonacci levels from the recent low of $324.63 to the high of $356.7 are critical. The 38.2% retracement level ($342.5) and 50% level ($340.6) are currently acting as dynamic supports. A breakdown below $340.6 would invalidate the immediate uptrend and target the 61.8% level ($337.4). Conversely, a breakout above $356.7 would extend the trend to the next Fibonacci target of $364.09, aligning with the September 15 high.

Backtest Hypothesis

The backtest strategy, which leverages RSI overbought signals from 2022 to the present, demonstrates a statistically significant edge for AVGO. With a 73.53% win rate over 30 days and a maximum return of 11.24%, the data suggests that overbought conditions often precede sustained gains. This aligns with the current RSI reading and reinforces the case for holding long positions. However, the strategy’s performance during periods of high volatility (such as the October 13 surge) should be validated with additional data to assess robustness in extreme market conditions.