$AVGO — Buy At This Long Term Elliott Wave W4 Target — July 31, 2024
### AVGO Long Term Elliott Wave 4 Update — July 31, 2024
Broadcom Inc. (AVGO), a global leader in semiconductor and infrastructure software solutions, has been undergoing a significant corrective phase following a peak at $184. This correction, identified as a Wave 4 in Elliott Wave theory, has seen AVGO retrace from its highs after completing an extensive Wave 3 rally. As of yesterday, the stock reached a key Fibonacci retracement level, signaling potential bullish momentum ahead.
#### The Current Wave 4 Correction
In Elliott Wave analysis, Wave 4 corrections often follow a strong Wave 3 impulse. These corrections can take various forms, such as zigzags, flats, or triangles, and are typically characterized by a consolidation period before the final impulsive Wave 5. For AVGO, this corrective Wave 4 has seen the stock decline from its peak at $184 to a recent low at $143, aligning with the 38.2% Fibonacci retracement level.
1. **Wave 4 Characteristics and 0.382 Retracement**: The .382 Fibonacci retracement is a common target for Wave 4 corrections, marking a potential reversal point where the market begins to regain bullish momentum. AVGO’s decline to $143 aligns precisely with this level, indicating that the corrective phase may be nearing completion. The stock’s ability to hold this support level is crucial for the prospects of a bullish reversal.
2. **Bullish Reversal Candlestick**: Yesterday’s trading session witnessed the formation of a bullish reversal candlestick pattern, which could indicate the end of the Wave 4 correction. This pattern, often characterized by a long lower shadow and a close near the day’s high, suggests strong buying interest at lower levels and a potential shift in market sentiment. This bullish signal is a positive indicator for traders looking for an entry point in anticipation of a Wave 5 rally.
#### Key Levels to Watch
1. **Breakout Level at $162**: A crucial resistance level for AVGO is around $162. A decisive break above this level would confirm the end of the Wave 4 correction and the start of Wave 5. Such a breakout would not only signal a shift in trend but also open the door for AVGO to retest and potentially surpass its previous highs.
2. **Wave 5 Target Range of $215-$220**: If AVGO successfully breaks above $162, the next major target would be in the $215-$220 range. This projection is based on the typical extension levels for Wave 5, often driven by renewed investor enthusiasm and strong market fundamentals. A move to these levels would represent a significant upside from current prices, providing substantial returns for investors.
#### Earnings and Market Sentiment
Although AVGO’s earnings are still a few weeks away, the market’s anticipation of the company’s financial performance could play a crucial role in its price action. Investors will closely watch the earnings report for insights into AVGO’s revenue growth, profit margins, and forward guidance. A strong earnings report could further fuel the bullish momentum and validate the Elliott Wave analysis, driving the stock towards the Wave 5 target range.
#### Conclusion
AVGO’s recent dip to the $143 level marks a critical juncture in its Elliott Wave structure. The formation of a bullish reversal candlestick and the approach to the $162 resistance level suggest that the Wave 4 correction may be concluding. Investors should monitor these key levels closely, as a breakout could signal the beginning of a new bullish phase, targeting the $215-$220 range. As always, market participants should consider both technical and fundamental factors, including the upcoming earnings report, when making investment decisions.
