AVGO closes below its opening price unable to hold early session gains
Broadcom Inc. (AVGO) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, AVGO finished Wednesday at 367.04 gaining $0.13 (0.04%), notably outperforming the Nasdaq 100 (-1.67%). Trading $3.82 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (AVGO as at Sep 16, 2020):
Wednesday's trading range has been $5.63 (1.53%), that's below the last trading month's daily average range of $9.15. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AVGO.
One bearish candlestick pattern matches today's price action, the Shooting Star.
Prices are trading close to the key technical resistance level at 367.83 (R1). After having been unable to move lower than 365.35 in the prior session, the market found buyers again around the same price level today at 366.37. The last time this happened on September 11th, AVGO gained 0.70% on the following trading day.
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 378.96, upside momentum could accelerate should Broadcom be able to break out to new highs for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Broadcom. Out of 511 times, AVGO closed higher 53.62% 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 63.80% with an average market move of 1.93%.