AVGO closes above its opening price after recovering from early selling pressure
Broadcom Inc. (AVGO) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
AVGO finished the week 6.24% higher at 276.65 after gaining $1.85 (0.67%) today on low volume, slightly outperforming the Nasdaq 100 (0.38%) ahead of tomorrow's Memorial Day market holiday. Trading up to $3.23 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on May 15th, AVGO gained 5.04% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (AVGO as at May 22, 2020):
Friday's trading range has been $6.74 (2.46%), that's slightly below the last trading month's daily average range of $7.30. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AVGO. Prices continued to consolidate within a tight trading range between 268.00 and 281.31 where it has been caught now for the whole last trading week.
The share managed to close back above the 100-day moving average at 274.82.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the close-by swing high at 281.31 where further buy stops could get triggered. Trading close to March's high at 288.48 we might see further upside momentum if potential buy stops at the level get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for Broadcom. Out of 759 times, AVGO closed higher 53.10% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 55.73% with an average market move of 1.14%.