Broadcom Inc. (AVGO) Shares Drop Over 4%
As shown by the chart, yesterday, shares of Broadcom Inc. (AVGO)a US technology company ranked in the top 10 by market capitalisationwere among the worst performers in terms of price movement.
This is a warning sign for those investing in semiconductor manufacturers, considering that:
Tomorrow, data on Nvidias second-quarter performance will be released;
Since mid-June, AVGO's share price has been underperforming the stock index.
A technical analysis of the AVGO chart provides further grounds for concern:
In 2024, the price formed an ascending channel (shown in blue), which remains relevant for now, despite a drop below the lower boundary on 5 August.
Price action in August indicates (marked by an arrow) that the median line of this channel, reinforced by the psychological level at $170, has now assumed the role of resistance.
In mid-July, there was a 10-for-1 stock split. It was expected that this would make investments in Broadcom Inc. more accessible to a wider range of market participants, but in reality, the price has fallen since then.
Since mid-June, when the RSI indicated extreme overbought conditions following the release of first-quarter results (a sign of market hype), the price has been increasingly forming the outlines of a descending channel (shown in red).
If AVGO's share price continues to underperform the market, it could lead to further bearish attacks on the lower boundary of the ascending channel.
Meanwhile, analysts remain optimistic. According to TipRanks:
23 out of 24 Wall Street analysts recommend buying AVGO shares;
The average price target for AVGO shares is $196 (a 23% increase from current levels) within the next 12 months.
Read more: https://fxopen.com/blog/en/oa-broadcom-inc-avgo-shares-drop-over-4/
Text source: Forex Trading Blog
