Broadcom Inc (NASDAQ:AVGO) shares taking a dive on Wednesday after reports surfaced declaring that Chinese regulators have told local companies to stop using cybersecurity software from about a dozen U.S. and Israeli firms over national‑security concerns.
China Moves To Block U.S. And Israeli Cybersecurity Vendors
According to Reuters, Chinese authorities recently instructed domestic firms to phase out software from several foreign cybersecurity providers. The list includes U.S. companies such as Broadcom‑owned VMware, Palo Alto Networks Inc (NASDAQ:PANW) and Fortinet Inc (NASDAQ:FTNT), along with Israel’s Check Point Software Technologies Ltd (NASDAQ:CHKP).
The notice went out in the past few days, though it’s unclear how many companies received it. Sources told Reuters that officials are worried the software could potentially collect or send sensitive data outside the country. They asked not to be identified because of the sensitivity of the situation.
The move comes as the U.S. and China continue to compete for tech dominance amid rising trade and diplomatic tensions.
Analyzing Broadcom’s Key Support And Resistance Levels
Broadcom is currently positioned below its key moving averages, indicating some bearish pressure. With the stock trading 1.6% below its 20-day SMA and 5.9% below its 50-day SMA, traders should be cautious as this setup suggests potential weakness in the near term.
The RSI is currently at 50.76, which is considered neutral. This level indicates that Broadcom Inc. Common Stock is neither overbought nor oversold, suggesting that momentum could shift either way depending on upcoming price action.
On the positive side, the MACD is still above its signal line, which points to some underlying bullish momentum. If that strength holds, it could help the stock make another run at those moving averages.
Key support is set at $321.50, while resistance is at $360.50. If Broadcom Inc. Common Stock tests the support level, it could signal a potential reversal or continuation of the current trend, while a breach of resistance may indicate a stronger upward move.
In May, the golden cross occurred when the 50-day SMA crossed above the 200-day SMA, which is a bullish signal for longer-term trends. This crossover suggests that the stock has the potential for sustained upward momentum, but current positioning below the shorter-term moving averages raises some concerns.
Broadcom Inc. Common Stock has performed well over the past 12 months, gaining 50.48%. This strong performance reflects the stock’s ability to recover from earlier lows and suggests that there is still investor interest, despite the recent pullback.
Currently, the stock is trading at 72.4% of its 52-week range, indicating it is closer to its highs than its lows. This positioning suggests that while there may be some short-term volatility, the longer-term trend remains positive.
AVGO Price Action: Broadcom shares were down 5.40% at $339.84 at the time of publication on Wednesday, according to Benzinga Pro.
Image: Piotr Swat/Shutterstock.com
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