Post-Trade Analysis: Broadcom (AVGO)

Hello Traders!

Mark from the Signal Trader Pro team here!

Each week, we break down a real trade to show you exactly how the Signal Trader Pro algorithm works—and what lessons we can take from it. This time, we’re diving into Broadcom (AVGO)—a global leader in semiconductor and infrastructure software solutions.

Ever feel like volatility is the enemy and big winners are off-limits? Not always. Sometimes, the best opportunities come from leaning into fear—especially when structurally sound leaders get unfairly punished. That’s exactly what happened with Broadcom (AVGO) after political uncertainty and the April 4 “Liberation Day” tariff announcement sent shockwaves through the market. While the headlines triggered panic, we saw a high-conviction setup emerging.

The result? A 43% gain in just 35 days (449% annualized). Here’s how it unfolded.

Company Overview: Broadcom Inc. (AVGO)

Broadcom is a global leader in semiconductor and infrastructure software solutions. Its products are essential to the backbone of modern technology—from hyperscaler data centers and broadband infrastructure to enterprise software stacks and AI acceleration.

Broadcom had been a standout winner in 2024, riding the AI wave to new all-time highs. But in early 2025, macro fears around rising tariffs and political instability disrupted even the strongest names. That’s when we moved in.

Spotting the Opportunity: Market Context & Setup

Broadcom hit an all-time high on December 16, 2024, before entering a volatile correction phase. By April 4, 2025—the day of the “Liberation Day” tariff announcement—AVGO had sold off nearly 39%, making it one of the steepest drawdowns among AI leaders. The selloff wasn’t driven by deteriorating fundamentals, but by political uncertainty, risk-off flows, and broad tech de-risking.

On April 3, Broadcom’s RSI fell below 30—a key level in our oversold screening system.

At this point, our Quantamental Scoring System flagged Broadcom with a perfect 15/15 rating.

Despite the price action, the fundamentals remained strong—indicating a high-probability setup in a structurally sound leader.

Executing the Trade: Entry & Exit

By April 7, RSI had crossed back above 30 and price began to stabilize, forming a bottom right as panic peaked. That crossover triggered our RSI Crossover Signal—a technical pattern that’s delivered high-reward entries in prior market leaders after deep shakeouts.

We entered the trade on April 8 at $161.32, with conviction that a bottom was in and momentum was turning.

The next day, Broadcom surged—gaining 20% on April 9 alone on news of a potential tariff pause. This wasn’t just a technical bounce—it was real institutional accumulation.

From April 10 to April 21, Broadcom consolidated with a 14% pullback, driven by continued uncertainty. But thanks to our alpha-based stop loss, we held through the volatility—never going negative on the trade.

After April 21, we never looked back with Broadcom trending cleanly above its 8-day MA until finally exceeding our price target. We exited on May 13 at $230.82, locking in a +43% return.

Quantamental Scoring Review

Each week, we highlight a portion of our proprietary Quantamental Scoring Algorithm, which evaluates stocks based on a blend of technical and fundamental factors.

Technical Screening System

We look for strong stocks in healthy uptrends that stumble temporarily, offering high-probability entries.

Broadcom is a model stock for this analysis. You rarely find it this oversold and it has always been a good buying opportunity.

• Strong Trend Structure – Both the 50DMA and 100DMA stayed above the 200DMA, confirming a strong uptrend.

• Positive Momentum – Broadcom maintained a positive return year over year despite a large selloff.

• RSI Cross Over Signal – The sell-off pushed RSI below 30, triggering our oversold alert. Historically, Broadcom has bounced strongly from this level, and our RSI back test confirmed the high probability of a reversal.

Earnings Surprise Analysis

One of the most powerful price drivers in our framework is earnings revisions—when analysts begin raising future estimates ahead of results.

For Broadcom, we observed a clear pattern of upward earnings revisions for 2025, driven by strong core demand and optimism in the AI cycle. This added confirmation gave us the conviction to hold through volatility and trust the setup.

Post-Trade Reflections: What this Trade Taught Us.

When the market sells fear, we buy structure.

Broadcom’s pullback wasn’t about weakness—it was about sentiment. The stock still showed leadership characteristics, capital return strength, and earnings momentum. What it lacked was emotional stability in the market—and that’s exactly when opportunity strikes.

This trade also reinforced the importance of trusting the process. Even during the 14% pullback post-entry, we stuck to our system. Our alpha-based stop loss gave us the framework to stay in the trade—avoiding premature exits and capturing the full move.

In an environment where volatility is the norm, process is our edge.

Drop a comment, let us know in the STP WhatsApp group chat or email us at [email protected].

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Disclaimer: This post is not financial advice. The stock market is risky, and any trade or investment is expected to have some, or total, loss. Please do your own research before making any trades. Do not use this information for investment decisions.