Three Rising Valleys Pattern on Broadcom Suggests the Stock Could Rally
The semiconductor sector has been hit particularly hard in the recent market decline, but Broadcom (Nasdaq: AVGO) has held up better than most. The stock did gap sharply lower back in July, but has been rallying since then.
The daily chart shows a particular bullish formation has formed in the last three months and that is a Three Rising Valley pattern. We see the three blue circles from the lows in late October, early December, and early January.
In two of the three instances where a valley was formed, we see that the stock was in oversold territory based on the stochastic readings. The recent oversold level just created a bullish crossover and that has been a pretty good sign for the stock in recent months.
Something could be helping Broadcom stand out above other chip companies are its fundamentals. The company has seen earnings grow at an annual rate of 36% per year over the last three years and they grew by 27% in the most recent quarterly report.
Sales have been growing as well. The annual rate of growth in the last three years is 47%, but they only grew by 12% in the most recent quarter.
The company’s management efficiency measures are particularly strong with a return on equity of 40% and a profit margin of 47.8%. Both of those measurements are well above average.
AVGO's MACD Histogram crosses above signal line
The Moving Average Convergence Divergence (MACD) for AVGO turned positive on July 08, 2026. Looking at past instances where AVGO's MACD turned positive, the stock continued to rise in of 54 cases over the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where AVGO advanced for three days, in of 350 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
The Momentum Indicator moved below the 0 level on July 23, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on AVGO as a result. In of 85 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The 10-day moving average for AVGO crossed bearishly below the 50-day moving average on June 16, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In of 13 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AVGO declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for AVGO entered a downward trend on July 13, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 70, placing this stock better than average.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. AVGO’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (21.277) is normal, around the industry mean (16.954). P/E Ratio (65.303) is within average values for comparable stocks, (235.870). Projected Growth (PEG Ratio) (0.441) is also within normal values, averaging (1.717). Dividend Yield (0.007) settles around the average of (0.014) among similar stocks. P/S Ratio (25.381) is also within normal values, averaging (43.360).
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
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General Information
a manufacturer of digital and analog semiconductor products
Industry Semiconductors
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