Broadcom Stock Could Bounce Back Toward Records

• StockStory Top Pick AVGO -2.14%

Semiconductor stock Broadcom Inc (NASDAQ:AVGO) has pulled back from its Oct. 29 record high of $386.48, last seen trading at $346.70. The stock is outperforming with a 50% year-to-date lead, however more gains could be imminent, as the 80-day moving average swoops in as historically bullish support.

Per Schaeffer's Senior Quantitative Analyst Rocky White, the equity is now within 0.75 of the 80-day moving average's 20-day average true range (ATR) after remaining above it during the last 20 trading days and 75% of the last six months. This signal has occurred nine other times over the past five years, after which the stock was higher one month later 100% of the time with an average 8.9% gain. A move of similar magnitude from AVGO's current perch would push it back up to $377.50, much closer to its record peak.

AVGO's 14-day relative strength index (RSI) of 23.9 sits firmly in "oversold" territory, which could be indicative of a short-term bounce. Plus, the equity tends to outperform options traders' volatility expectations, per its Schaeffer's Volatility Scorecard (SVS) of 83 out of 100.