Perfect Timing on A Great Stock (BRCM)
Published: 2024-04-04 22:48:53
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Today’s Company Invest pick is Broadcom (BRCM). Broadcom is a very high quality Nasdaq stock. This is an exciting pick. Unlike many shorter term trades, this stock pick could be set up for a multi-week or multi-month hold here.
BROADCOM PROFILE (BRCM)
Broadcom Corporation designs, develops, and supplies semiconductors for wired and wireless communications. It provides a portfolio of system-on-a-chip and software solutions, which enable the delivery of voice, video, data, and multimedia content to mobile devices; consumer electronics devices in the home; and business networking products for the workplace, data centers, service providers, and carriers.
It markets and sells its products through direct sales force, distributors, and manufacturer’s representatives in the United States, as well as through regional offices, and a network of independent distributors and representatives in Asia, Australia, Europe, and North America. The company was founded in 1991 and is headquartered in Irvine, California.
FUNDAMENTAL TIDBITS
- Forward PE: 13.17. This is a perfect time to grab such a high quality stock while it’s still a value play.
- Return on Equity: 22.26% (Very, Very strong in this economy)
- Operating Cash Flow (1.37 Billion) (Lots of Capital to work with)
TECHNICAL ANALYSIS FOR BRCM
Today, we are looking at a weekly candlestick chart of BRCM. Each candle on the chart represents one trading week. The weekly chart is PERFECT for longer term trades and investments, and boy is this one set up nicely.
Starting with the slow stochastic indicator, we can see it has finally bottomed out after 3 months of selling! The last time the indicator was this low and rising was August 2010. In 3-1/2 months BRCM went from $32.50 to $47.50, or a 46% GAIN!!!! Here we are again with a perfect setup. This indicator is rarely wrong.
Next, the news gets even better when looking at the weekly price chart. BRCM has been in a bull trend since March of 2009. In that time, the price has bounced off of the 50 week moving average (blue line) 5 times, with every single one producing monstrous gains. Now, we have a 6th time. Should you buy now? YES!
Next, the MACD histogram has formed a PpP bullish reversal pattern this week. Essentially this is just a change in direction in the blue histogram bars. This is a good signal, and we’ll look for confirmation with a close above this week’s candle over the next week or two.
Finally, we look at the ADX momentum indicator. Although there hasn’t been a bullish +DI cross yet, the ADX line (black line) appears to be changing direction marking a change in momentum.
BOTTOM LINE: It’s still early, but BRCM is a screaming buy here. Grab it here and put your stop below the 50 week moving average (38.41 or so). This could easily make new highs and eclipse $47.50 over the next 2-3 months!