AVGO - gaps down on rumor of Google changing suppliers

AVGO had a volatile premarket and a gap down on open on the news of GOOG cutting them as a supplier.

reuters.com/technology/google-discussed-dropping-broadcom-ai-chips-supplier-the-information-2023-09-21/

This kind of news pops up for chip suppliers and rarely amounts to much.




The gap down closed the small gap from 8/21. If we take a measured moves of the gap from the most recent highs we could see price move in a new range that comes down to ~765, or even ~720. The 720 range would fill the gap from May.

I anchored a VWAP to the March 13 candle. This candle was the first test of the March gap up and established the consolidation range that took place for the next two months. This VWAP coincided with the low during the premarket selloff. It will be important for this level to hold as support otherwise we could see a test of the VWAP from the November 2022 gap up or the VWAP from the end of the October drawdown. Note that each of these are displaying confluence with the 200SMA and the bottom of the larger measured range down. All of which are below the opening of the May gap.

My game plan from Aug 8 remains in place.

My first buy orders target hit during pre-market and my remaining at ~750 and ~730 are still in place.