Broadcom Inc. is currently experiencing a reversal in its stock price, possibly leading to a significant move lower. This has caught the attention of trading experts, who have designated Broadcom as the “Stock of the Day.” A change in market leadership, whether from bears to bulls or vice versa, can result in a reversal pattern on the chart. This pattern may manifest as a “bearish engulfing pattern” if it happens suddenly in one day, or as a “rounded bottom” or “rounded top” if it occurs gradually over a longer period.
Broadcom recently completed an inverted “upper V” pattern on its chart, indicating a shift from bullish to bearish sentiment. The bulls were in control of the market in early June, driving the price up, but the bears have since taken over and are pushing the price down. This shift could potentially lead to the stock filling a gap, accelerating the downward movement.
Support in the market is often generated by seller’s remorse, where individuals regret selling shares that increase in value afterward. In the case of AVGO, the stock closed at around $1,495 on June 12 and opened the following day at approximately $1,710, creating a gap on the chart. Since there were no transactions within this price range, there may be limited buying interest in this area.
If the stock reverses and returns to this gap, sellers looking to offload their shares may struggle to find buyers, leading them to offer their shares at a discount. This could prompt a quick sell-off that fills the gap and brings Broadcom back to its starting point before the price increase.
Overall, the recent price action and chart patterns suggest that Broadcom Inc. may be poised for a significant downward move in the near future. Traders and investors should closely monitor the stock for potential opportunities or risks associated with this reversal.
Article Source
https://www.benzinga.com/trading-ideas/technicals/24/06/39464420/broadcom-pulls-a-nvidia-as-shares-reverse-appear-likely-to-refill-gap-chart
