Watch these Broadcom price levels as the stock declines on the back of soft earnings

Shares fell nearly 7 percent in extended trading Thursday

Key recommendations

• Shares of Broadcom fell nearly 7 percent in extended trading Thursday after the chipmaker posted fiscal third-quarter results that beat expectations but issued light guidance on current-quarter revenue.

• Shares are positioned to break out of a symmetrical triangle pattern on Friday following the company’s weaker-than-expected sales outlook, potentially starting a new trend lower.

• Investors should monitor important lower price levels on Broadcom’s chart at $141, $120, $104 and $91.

Broadcom (AVGO) shares fell nearly 7 percent in extended trading Thursday after the chipmaker posted fiscal third-quarter results that beat expectations but issued soft revenue guidance for the current quarter. Lower spending in its broadband business and other divisions, partially offsetting strength in its artificial intelligence (AI) segments.

The Silicon Valley chipmaker’s stock, up about 75% in the past year to Thursday’s close, has benefited from growing demand for the custom chips and networking pieces used by companies to power and build AI applications and infrastructure .

Below, we’ll take a closer look at Broadcom’s chart and use technical analysis to identify post-earnings levels that investors are likely to be watching.

Breakdown of the symmetrical triangle

Broadcom shares have been trading in a descending symmetrical triangle on volume since mid-June, with the price sending an ominous signal ahead of the chipmaker’s quarterly report, testing the pattern’s lower trend line.

The stock is positioned to post a significant triangle breakout on Friday following its weaker-than-expected sales outlook, possibly starting a new downtrend. Broadcom shares fell 6.7 percent to $142.53 in after-hours trading Thursday.

Key Lower Broadcom Chart Levels to Watch

With Broadcom shares set to open sharply lower on Friday, investors should focus on several important price levels.

The first is around $141, an area of ​​the chart where the stock could find support near a horizontal line connecting a consolidation range between early March and early June toward the end of the stock’s multi-year uptrend.

A move below this level may lead to a sell-off to the $120 level. Investors may see this location on the chart as a high-probability buy zone due to its proximity to two important lows that formed in March and April.

The next level to watch is at $104, where the stock could find support near the low of an early January pullback that followed the stock’s strong performance in December.

The story continues

Ultimately, a deeper correction could send Broadcom shares lower into the $91 region. This level would likely attract bargain hunters looking for buying opportunities near a trend line joining multiple highs and lows from last May to December.

Interestingly, this location also lines up with a down move target measured when calculating the symmetrical triangle distance and subtracting that amount from the lower trend line of the pattern. ($62 – $153 = $91).

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