Time to Buy the Dip on Broadcom Stock

The semiconductor stock boasts a healthy year-to-date lead

Jake Scott

Deputy Editor

Aug 6, 2024 at 2:10 PM

AVGO

The VanEck Semiconductor ETF (SMH) secured its third-straight loss yesterday, as recession fears in the U.S. weighed on the entire chip sector. Broadcom Inc (NASDAQ:AVGO) mirrored this negative price action, though the retreat put the shares near a historically bullish trendline.

Specifically, Broadcom stock is trading within one standard deviation of its 126-day moving average. Per data from Schaeffer's Senior Quantitative Analyst Rocky White, four similar signals were observed in the last three years. AVGO saw a positive one-month return in each time, averaging a 5.7% gain. From its current perch, a comparable move would place the stock above $154.

AVGO Chart August 0632024

On the charts, the security has pulled back since touching a June 18 all-time high of $185.16, while the $128 mark saved yesterday's massive dip. Despite the recent pullback, AVGO still sports a 60.5% year-to-date return, and is up more than 62% over the last 12 months.

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