Broadcom has been in the process of forming an inverse head and shoulder setup since August 2011. This popular pattern indicates exhaustion among sellers, a fact that BRCM buyers should be using to their advantage right now. The neckline at $38 was the breakout level to watch in BRCM, but shares have held above that level for a week and change now. With shares consolidating just above the neckline, it makes sense to be a buyer on the next thrust up for BRCM.
Even though the head-and-shoulders (and its inverse) is likely the most well known technical pattern, it's still a valuable one: an academic study conducted by the
Federal Reserve Board of New York found that the results of 10,000 computer-simulated head-and-shoulders trades resulted in "profits
Twitter and become a fan on Facebook.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts