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Broadcom'sundefined narrow range-bound trade pattern appears to be giving way to a significant breakout. The stock is up more than 1.5% and has begun to pierce heavy resistance just below $54. If Broadcom can extend today's upside reversal over the next few days, it will be set up well for a run back up to the 52-week highs. Broadcom bulls should keep a close eye on today's action. A low-risk buying opportunity could be developing just ahead of a powerful breakout move.

Broadcom's rebound off the Aug. 24 low, which held the 200-day moving average, ran out of steam in mid-September. As shares returned to the $54 area, which marked the July high, upside momentum was completely used up. What followed over the next eight weeks was a narrowing consolidation pattern as shares churned below $54. Last month, Broadcom peaked near $53.40 while in November the stock reached a high of $53.85. Needless to say, a clear break above this string of monthly highs could attract a significant amount of attention.

In the near term, investors should remain positive on Broadcom. The stock is not quite in full breakout mode yet, but that could change quickly. Once shares are able to put a bit of distance on the $54 level, a very solid layer of support will be in place. This zone's lower band is the $53 area. A close back below $52 would be a clear warning sign that the breakout is in danger of failing.

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Disclosure: This article is commentary by an independent contributor. At the time of publication, the author was long BRCM.