Watch these Broadcom stock price levels ahead of the chipmaker’s earnings report

Stocks recovered 50-day moving average last month

Key recommendations

• Shares of Broadcom could see increased volatility this week, with the chipmaker set to release its fiscal third-quarter earnings report after the closing bell on Thursday.

• Investors will likely look to the company’s AI sales growth and full-year outlook, which have benefited in recent quarters from growing demand for its custom AI chips.

• Shares of Broadcom recovered last month’s 50-day moving average after a steep correction, with its recovery produced on declining volumes, indicating a lack of institutional activity.

• Investors should monitor the lower chart levels at $157 and $141, while eyeing important higher levels around $168 and $195.

Broadcom (AVGO) shares could see increased volatility this week, with the chipmaker set to release its fiscal third-quarter earnings report after the closing bell on Thursday. Investors will likely look at the company’s artificial intelligence sales growth and full-year outlook, which have benefited in recent quarters from growing demand for its custom AI chips.

The chipmaker’s shares, which are trading about 11 percent below their record close, have spent most of the past month recovering from a recent steep correction that was triggered by a general sell-off in tech stocks and profit taking after shares went 10 for -1 share split in July.

Below, we look at Broadcom’s technicals and identify key price levels to watch for heading into the company’s quarterly report.

Declining volume accompanies the recent recovery

Since setting a record high in mid-June, Broadcom shares have fallen as much as 31% before staging an impressive rally through most of August to retrace its 50-day moving average (MA) to at the end of the month. However, it’s worth noting that recent purchases have been in lower volume, indicating a lack of institutional activity.

With Broadcom’s quarterly results in mind, investors should keep an eye on a few important chart levels that could come into focus.

Lower price levels to monitor

The first lower price tier in the game is around $157. This area, currently about 4% below Friday’s close, could find support from a horizontal line connecting the recent June and August lows.

Failure to hold this key location could send the stock lower to the $141 area, a chart location where investors can look for buying opportunities near a four-month period of sideways movement in stocks between May and June.

Higher price levels to watch

An initial move higher from current levels may propel a jump to $168, where the stock could encounter resistance near several trading levels that formed on the chart in June and July. The area is also in a position close to last month’s high and a trend line joining the June and August highs.

The story continues

To project a price target above the all-time high (ATH), we can extract the stock’s trend move from December to March, which started with a similar price action to last month’s recovery, and reposition it from the swing from August. One such technical forecasts a bullish target of around $195, about 5% above Broadcom’s all-time high.

Broadcom shares were down 1.3% at $160.70 in premarket trading around 7:10 a.m. ET Tuesday.

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