Shares of Broadcom Corporation (NASDAQ:BRCM) closed the trading session at $42.09 below calculated support at $42.24 breaking current long setups, raising concerns by the bulls, as this move might give the bears the upper hand.
Broadcom Corporation (NASDAQ:BRCM) provides integrated silicon solutions that enable broadband digital data transmission of voice, data, and video content to the home and within the business enterprise. The Company designs, develops, and supplies integrated circuits for cable set-top boxes, cable modems, high-speed networking, direct satellite and digital broadcast, and digital subscriber line.
Broadcom's stock was trading in a well defined range with support at $42.24 and resistance at $46.46; given that this range was broken traders will be closely monitoring the stock's price action for clues of direction.
From a technical perspective it can be expected that previous support becomes resistance, as the new range gets defined, however, given that Broadcom's stock is still near the broken support, traders will be focusing on $42.24 to see if the stock can bounce back and return to its previous range.
Traders wanting to establish a short position in Broadcom can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $42.24. For traders wanting to establish a long position, wait for price action to take the stock back to calculated support, which will provide a best entry point to build the position.
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