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Broadcom Inc. (AVGO) shares climbed nearly 2% on Thursday, joining a broad rally in chip and mega-cap tech stocks. The Nasdaq rose 1.07%, and the S&P 500 gained 0.71%, with investors showing a clear appetite for large-cap semiconductor names.
But it's not just the market tide lifting Broadcom. The stock's own technical picture has been looking increasingly bullish, and that's drawing buyers even as the company approaches its next earnings report.
Broadcom is trading comfortably above its major moving averages. The stock sits about 5.9% above its 20-day simple moving average of $398.61 and 14.4% above its 200-day average of $369.07. The 20-day average is also above the 50-day average, and the stock formed a golden cross back in April when the 50-day crossed above the 200-day. Both signals point to a sustained uptrend.
Momentum is also on the bulls' side. The moving average convergence divergence (MACD) is above its signal line, and the histogram is positive, suggesting buying pressure is building.
That said, there are levels to watch. Resistance sits near $429.50, where the recent advance could hit some selling. Support is around $370, close to the 200-day moving average, which could act as a floor if the stock pulls back.
Broadcom is scheduled to report earnings on Sept. 2. Analysts are looking for earnings of $3.16 per share, up from $1.69 a year earlier. Revenue is projected at $29.44 billion, a big jump from $15.95 billion in the year-ago period.
The stock trades at a price-to-earnings ratio of about 69.2, which is a premium valuation by any measure. Still, the Street remains bullish: Broadcom has a consensus Buy rating and an average price target of $513.68.
Recent analyst moves have been mixed but mostly positive. Erste Group downgraded the stock to Hold on July 7, while UBS maintained a Buy but cut its price target to $485 on June 4. Bank of America Securities also kept a Buy rating and raised its target to $530 on June 4.
MarketDash rankings paint an interesting picture. Broadcom scores high on momentum and quality but weak on value and growth:
These scores suggest a stock that's being carried by strong business fundamentals and positive price action, but at a price that leaves little room for error. The weak value score is a red flag if growth starts to slow.
Broadcom is a heavyweight in several tech and semiconductor ETFs, which can amplify moves in the stock. Here are the top weightings:
Because of these large weightings, inflows or outflows from these funds can create meaningful buying or selling pressure in Broadcom shares.
Broadcom shares were up 2.08% at $424.71 at the time of publication on Thursday, according to market data.
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