Broadcom's stock declined to a session-low at 512.44, bouncing higher after leaning on the support of 513.70, lending it positive momentum, and shaving some losses to 0.55%, or 3.02 points, and settling at 543.19, with trading volumes surpassing 4 million shares, above 10-day averages of 2.8 million shares.
The downward correctional short-term trend continues to dominate, amid negative pressure from the 50-day SMA, coupled with negative signals from the RSI.
Sources said that Broadcom is conducting talks to acquire cloud services provider VMware Inc in a deal that aims to turn Broadcom into a multi-sector tech company, with negotiations still ongoing.
Broadcom manufactures chips used in products such as cellphones and communication networks, but purchasing VM would give it the ability to reach new client and data bases.
Therefore we expect the stock to decline and target the pivotal support of 513.70, provided the resistance of 593.07 holds on.
Expected trend for today: Bearish