Broadcom Stock Rises 16.23% In Five Days As Technicals Signal Bullish Momentum

Broadcom (AVGO) recently closed at $345.65, rising 3.21% for its fifth consecutive daily gain, bringing the five-day surge to 16.23%. This strong momentum forms the backdrop for a comprehensive technical assessment using the specified framework.
Candlestick Theory
The most recent sessions show strong bullish momentum. The sharp rally on September 5th (9.41% gain, high volume) formed a decisive breakout candle from consolidation near $300. Subsequent candles traded in a tighter range near $334–$354, suggesting consolidation after the surge. Key resistance is evident at $354.17 (September 5th and 8th highs), while $331.42 (September 5th low) and $302.39 (September 3rd close) serve as critical support levels. A close above $354.17 could signal continuation, whereas failure here may invite short-term profit-taking.
Moving Average Theory
Broadcom trades well above all key moving averages, confirming a robust uptrend. The 50-day MA (currently near $290) crossed above the 200-day MA (near $250) in early August, establishing a "Golden Cross" – a major bullish indicator. The 100-day MA (near $270) slopes upward, reinforcing intermediate support. The price holding above the shorter-term 50-day MA suggests sustained bullish control, with the MAs acting as dynamic support. The sequence (50 > 100 > 200) reflects strong long-term trend alignment.
MACD & KDJ Indicators
The MACD (12,26,9) resides in positive territory with its histogram expanding since late August, supporting bullish momentum. However, a minor bearish divergence appears: the September 8th price high ($354.17) slightly exceeded the September 5th peak ($356.34), while the MACD histogram failed to reach a new high, potentially signaling slowing upward momentum. The KDJ oscillator (particularly the %K and %D lines) is deeply overbought (>85), hinting at near-term exhaustion. While divergence and overbought KDJ suggest potential consolidation, the strong MACD trend softens the reversal warning.
Bollinger Bands
Price action is pressing against the upper Bollinger Band ($350–$355, 20-period, 2 SD), reflecting persistent upward pressure. Band width expanded significantly during the early September breakout, indicating rising volatility. While trading near the upper band often precedes short-term pullbacks, the lack of sharp reversal candles and band expansion suggests the trend may extend before mean reversion. A move below the midline (20-SMA near $300) would signal significant weakening.
Volume-Price Relationship
Volume surged 84% to 78.4 million shares on the September 5th breakout, validating the bullish move. Subsequent consolidation saw lower volume (e.g., 31.2M on Sept 4th), typical of a healthy pause. Recent volume increased to 42.6M on September 8th as prices advanced again, suggesting renewed accumulation. The high-volume breakout and persistent volume on up days reinforce sustainability. The only concern is declining volume on the latest push to $354.
Relative Strength Index (RSI)
The 14-day RSI is elevated at approximately 76, deep in overbought territory (>70). Historically, Broadcom's RSI has sustained levels above 70 during powerful rallies (e.g., April-June 2025), limiting its reliability as a standalone reversal signal. The current RSI reading may flag short-term overextension but aligns with the prevailing trend strength. Traders should monitor for bearish divergence or a decisive drop below 70 for weakening momentum confirmation.
Fibonacci Retracement
Applying Fibonacci levels to the dominant uptrend from the April 2025 low ($146.29) to the September 2025 high ($354.17):
- 38.2% retracement: ~$272 (coinciding with the August consolidation zone)
- 50% retracement: ~$250 (aligning with the 200-day MA)
- 61.8% retracement: ~$228
The price holding well above the 38.2% level after the breakout underscores bullish resilience. These levels now serve as key support zones should a deeper correction materialize.
Confluence & Divergence Summary
Confluence of bullish signals is pronounced: moving averages are bullishly stacked, MACD confirms momentum, volume validated key breakouts, and price holds above critical Fibonacci support. Notable divergences exist – MACD histogram divergence and overbought KDJ/RSI readings against recent highs suggest growing exhaustion risk. This creates a near-term tension: strong trend momentum versus overextended oscillators. Traders should watch the $354 resistance; a decisive break could extend gains toward psychological $370, while rejection could trigger consolidation toward $331–$335 support. The long-term trend remains structurally intact, but short-term consolidation appears increasingly probable.