AVGO breaks back above 20-day moving average
Broadcom Inc. (AVGO) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, AVGO finished the month 0.36% higher at 316.75 after gaining $4.65 (1.49%) today on high volume, slightly underperforming the Nasdaq 100 (1.78%). Trading up to $3.24 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (AVGO as at Jul 31, 2020):
Friday's trading range has been $6.94 (2.21%), that's slightly above the last trading month's daily average range of $6.79. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AVGO.
Broadcom managed to close back above the 20-day moving average at 313.75 for the first time since July 21st. When this moving average was crossed above the last time on July 20th, AVGO actually lost -0.88% on the following trading day. Unable to break through the key technical resistance level at 317.44 (R1), the market closed below it after spiking up to 318.40 earlier during the day. The failure to close above the resistance might increase that levels significance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
With prices trading close to this year's high at 331.58, upside momentum could speed up should the share be able to break out to new highs for the year. Further buying might move prices higher should the market test June's close-by high at 328.11.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 20" stand out. Its common bullish interpretation has been confirmed for Broadcom. Out of 144 times, AVGO closed higher 51.39% 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 59.03% with an average market move of 1.19%.