Broadcom Ltd is setting up nicely for a breakout.

Broadcom Ltd (NASDAQ:AVGO) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NASDAQ:AVGO.

Technical analysis of NASDAQ:AVGO

ChartMill assigns a proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.

We assign a technical rating of 8 out of 10 to AVGO. Both in the recent history as in the last year, AVGO has proven to be a steady performer, scoring decent points in every aspect analyzed.

• The long term trend is positive and the short term trend is neutral. The long term trend may just continue or reversal may be around the corner!
• When comparing the yearly performance of all stocks, we notice that AVGO is one of the better performing stocks in the market, outperforming 73% of all stocks. We also observe that the gains produced by AVGO over the past year are nicely spread over this period.
• AVGO is currently trading in the upper part of its 52 week range. The S&P500 Index however is currently trading near a new high, so AVGO is lagging the market slightly.
• In the last month AVGO has a been trading in the 455.71 - 494.02 range, which is quite wide. It is currently trading in the middle of this range where prices have been consolidating recently, this may present a good entry opportunity, but some resistance may be present above.
• AVGO is part of the Semiconductors & Semiconductor Equipment industry. There are 103 other stocks in this industry, AVGO did better than 47% of them.

How do we evaluate the setup for NASDAQ:AVGO?

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NASDAQ:AVGO currently has a 8 as setup rating:

Besides having an excellent technical rating, AVGO also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 489.96. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 466.92, a stop order could be placed below this zone. Very recently a Pocket Pivot signal was observed. This is another positive sign.

Trading breakout setups.

For a potential trade one would typically wait until the stock breaks out of the consolidation zone to enter the stock and it could be sold again for a loss when it would fall back below the zone.

This article should in no way be interpreted as trading advice. You should always make your own analysis and trade or not trade based on your own observations and style. The article is based purely on some technical observations.

Every day, new breakout setups can be found on ChartMill in our Breakout analyzer.