Sometimes, lines in the sand are drawn and you have a clear level where you can bet the house price is going to react in one of two ways. One way would be for price to bounce or reject off that level depending where price is approaching from. Other times, you can get a level that breaks and then its off to the races.
Today’s level on Broadcom (AVGO) is both. As you can see by looking back on the chart for AVGO, you’ll see a zone from about 922-925 where price has been struggling to make past. This is our area of interest on this trade breakdown.
There’s two ways the can play out for us, but both of them require a great deal of patience from us. We must first wait for price to get at or near this zone. Then, we need to gauge price action and which move it favors. Is it favoring a strong push through this level, or is price failing to go higher attempt after attempt?
Currently, a reject seems a bit more likely than a strong push and close above 925. However, if the rest of the market decides to pick up, that could be all that’s needed to push price through this resistance level.
The flip side is also true. If the market begins to lose some steam, it could make the chance of there being a massive reject all the more likely. One thing is for certain, this is another trade setup worth keeping on your watchlist.
Learn even more about my trading strategy when you join The Profit Machine. There, I’ll teach you all about my favorite stocks, setups, strategies, and plenty more to make sure you can take your own trading to the next level. You’ll also be invited to weekly webinars where I answer questions and go over important trading lessons, like the one in today’s article. The best part, you’ll also receive live trade alerts. Not only will you get a world-class education, but you’ll earn while you learn.
This year is drawing to a close, make sure you’re turning the corner on your trading to position yourself to win all 2024. Sign up today! Until then…