Broadcom stock could bounce off a historically bullish trendline
Broadcom Inc (NASDAQ:AVGO) stock was last seen down 3.9% to trade at $181, on track for its third-straight daily drop as the
tech sector struggles. Though shares have dropped 21.5% so far in 2025, they still sport a 36.6% year-over-year lead. Plus, a historically bullish signal now flashing indicates AVGO could soon rally.
According to Schaeffer's Senior Quantitative Analyst Rocky White,
the equity is trading within one standard deviation of its 200-day moving average, a move that has produced gains in the past. This comes after a prolonged period above this trendline (defined by White as 80% of the time in the past two months and eight of the last 10 trading days).
A similar move occurred six times in the past three years, after which AVGO was higher a month later 50% of the time, averaging a 10% gain. From its current perch, this would place the stock just above $199.
Now looks like an excellent opportunity to bet on the stock's next move with options. Its Schaeffer's Volatility Index (SVI) of 41% stands in the 5th percentile of its annual range, suggesting low option premiums -- a boon for buyers.