Broadcom (AVGO) isn’t just another semiconductor company.

It’s the second-largest chip maker in the world.

At a market capitalization of $1.2 trillion, Broadcom is worth about $200 billion more than Taiwan Semiconductor (TSM) and about $2 trillion less than Nvidia (NVDA).

It’s also one of the cleanest long-term uptrends on the planet.

What a Long-Term Uptrend Looks Like

Over the last decade, AVGO has returned a compound average annual growth rate of more than 32%.

What stands out?

Every major breakout has led to a multi-quarter rally followed by a shallow consolidation before the next leg higher:

Just look at that long-term uptrend.

AVGO has respected these Fibonacci extensions for decades. And I think that will likely continue.

Last December, price reached its next key extension level and has been consolidating since then.

I think it’s about to break out and make a fresh leg higher.

Here’s why:

AVGO is making new all-time highs relative to its peer group, the VanEck Semiconductor ETF (SMH).

You’ll notice on the chart that the ratio has made a lot of all-time highs.

That’s another uptrend.

We look for consistent outperformance in the best stocks.

And that’s exactly what we have here with AVGO.

AVGO’s Gap-n-Go

Let’s zoom in on recent price action.

AVGO has carved out a textbook base:

Action Plan: I think AVGO is about to resolve this base and make new all-time highs.

Broadcom reports earnings after the closing bell Thursday. And I’m looking for a gap-n-go Friday morning.

Meanwhile, a good earnings reaction from AVGO would also spark a huge rally in the semiconductor industry and the AI trade.

And that’s good for the market at large.

Stay sharp,

JC Parets, CMT Founder, TrendLabs

P.S. If you are looking for more trading ideas like this, I am working with the Monument Traders Alliance team to set up a new demo session. Stay tuned for more details.