The semiconductor industry has experienced significant volatility in 2026, with a recent sharp correction affecting many leading companies. Despite this, there are early signs of recovery in the tech sector, particularly for Broadcom. The author, Nishant Pant, emphasizes the importance of technical analysis in evaluating the stock's potential.
He highlights three key indicators: the Accelerated MACD, which is coiled but may lead to false signals; the Relative Strength Index (RSI), currently at 44.7 and lacking a strong upward trend; and the Directional Movement Index (DMI), which shows a potential shift in trend as buying pressure increases.
Pant suggests waiting for confirmation before entering a trade, proposing a bull call spread strategy with specific strike prices and expiration dates. This cautious approach aims to mitigate risk while positioning for potential gains if the stock confirms a breakout