Broadcom Beats Earnings Estimates, But The Stock Lags All-Time High

beat earnings-per-share estimates for the 36th consecutive quarter and raised its current-quarter outlook as they expect strong demand for 5G cellphones. The stock traded as high as $506.00 this morning, which is shy of the all-time intraday high of $507.85 set on August 30.

Shares of Broadcom has been above a golden cross on its daily chart since July 6, 2020, when the stock could have been bought at $318.79. The weekly chart is positive but is nearly overbought. The stock has a p/e ratio of 22.61% and offers a dividend of 2.92%. This is reasonable statistics given its momentum characteristics.

The Daily Chart for Broadcom

The daily chart for Broadcom shows that the stock has tracked its 50-day simple moving average over the last 52 weeks. Not shown is the golden cross that was confirmed on July 6, 2020.  

Note that the positive reaction to earnings today stayed shy of its August 30 all-time intraday high of $507.85. The monthly risky level for September is above the chart at $510.87. The downside risk is to the 200-day simple moving average at $459.66. The horizontal lines are quarterly, annual and semiannual value levels at $459.76, $452.41, and $448.03, respectively.

The Weekly Chart for Broadcom

The weekly chart for Broadcom is positive with the stock above its five-week modified moving average at $485.19. The stock is well above its 200-week simple moving average or reversion to the mean at $315.48. The 12x3x3 weekly slow stochastic reading is rising at 77.89 and will likely be overbought above 80.00 if the stock stays above its 5-week MMA.

Trading Strategy: Buy weakness to the 200-day simple moving average at $459.66 and its quarterly, annual and semiannual value levels at $459.76, $452.41 and $448.03, respectively. Reduce holdings on strength to the monthly risky level at $510.87.

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