$AVGO Elliott Wave Update Aug 7 — Wave 2 in progres
### $AVGO Elliott Wave Update Aug 7 — Wave 2 in Progress
Broadcom Inc. ($AVGO) is currently experiencing a corrective phase, commonly referred to as Wave 2 in Elliott Wave theory. Understanding this wave pattern is essential for traders and investors aiming to capitalize on potential bullish trends.
#### Recent Wave Movements
1. **Wave 1 Rally**:
— AVGO initiated a strong Wave 1 move, climbing from a low of 131 to a high of 150. This significant upward movement represents a bullish impulse, suggesting that market participants are optimistic about the stock’s prospects.
2. **Wave 2 Correction**:
— Currently, AVGO is undergoing a Wave 2 correction. This phase typically retraces a portion of the gains made during Wave 1. In this instance, the correction is expected to find support around the .618 Fibonacci retracement level at approximately 137.5.
— The .618 Fibonacci retracement is a critical level in Elliott Wave analysis, often acting as a strong support during corrective phases. Maintaining this level is crucial for the continuation of the bullish trend.
#### Key Levels to Watch
For AVGO to resume its upward momentum and confirm the initiation of Wave 3, several pivotal price points need to be monitored:
1. **Support at 137.5**:
— AVGO needs to hold the 137.5 level, corresponding to the .618 Fibonacci retracement of the Wave 1 rally. This level serves as a crucial support point, indicating a potential bottom for the corrective phase.
2. **Resistance at 146**:
— To set up for Wave 3, AVGO must break above the 146 level, which represents the .786 Fibonacci retracement of the correction. Breaking this resistance is essential for confirming the end of Wave 2 and the beginning of Wave 3.
#### Wave 3 Projections
Assuming AVGO can hold the 137.5 support and break above the 146 resistance, it would pave the way for a robust Wave 3. In Elliott Wave theory, Wave 3 is often the most powerful and extended of the impulse waves, frequently targeting 1.618 times the length of Wave 1.
1. **Potential Targets for Wave 3**:
— Based on the length of Wave 1 (131 to 150), the projected target for Wave 3 could be as high as 165 to 170. This projection is derived from the 1.618 Fibonacci extension, a typical target in Wave 3 scenarios.
#### Market Sentiment and Implications
Market sentiment around AVGO remains cautiously optimistic. The recent Wave 1 rally indicates strong bullish momentum, but the ongoing correction phase requires careful observation. Holding the 137.5 support level is vital for maintaining the bullish outlook, while breaking above 146 would confirm the continuation of the upward trend.
The broader market environment, including sector performance, overall market trends, and specific news related to Broadcom, will also influence the stock’s trajectory. Investors and traders should closely monitor these developments, along with the key technical levels outlined above.
#### Conclusion
AVGO is currently in the midst of a Wave 2 correction, with crucial support at the .618 Fibonacci retracement level of 137.5. For the bullish scenario to unfold, AVGO must hold this support and break above the 146 resistance, setting the stage for a potential Wave 3 rally targeting 165 to 170.
Monitoring these key levels and market sentiment will be essential for navigating AVGO’s price movements in the coming days. The next few trading sessions will likely provide critical insights into whether the bullish scenario unfolds as anticipated.
