Chart of the Day - Tuesday, May 30, 2023

$AVGO oh dear pic.twitter.com/xrr0nHTqKd

— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) May 30, 2023

Today's Chart of the Day was shared by Mike Zaccardi (@MikeZaccardi). Broadcom ($AVGO) broke out to record highs last week, as it caught a sympathy bid from $NVDA. This was a textbook breakout from an 18-month base, but the rally hit a brick wall today. It was up as more than 13% this morning. However, it reversed hard intraday, closing down 1.33%. Today's reversal left the daily candle looking like a 'shooting star.' This bearish candlestick formation signals an exhaustion of buyers. Today's reversal occurred at a confluence of two key Fibonacci levels - the 1.618% extension of last year's decline, and the 423.6% extension of the Covid decline. It's been a wild few days for $AVGO, but it will likely continue to be in the spotlight this week as the company reports earnings on Thursday.