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Broadcom - BRCM - close: 29.90 chg: -0.30 stop: 31.11

Company Description:
Broadcom Corporation is a global leader in wired and wireless broadband communications semiconductors. Our products enable the convergence of high-speed data, high definition video, voice and audio at home, in the office and on the go. Broadcom provides manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices with the industry's broadest portfolio of state-of-the-art system-on-a-chip and software solutions. These solutions support our core mission: Connecting everything. Broadcom is one of the world's largest fabless semiconductor companies, with annual revenue of more than $2 billion. The company is headquartered in Irvine, Calif., with offices and research facilities in North America, Asia and Europe. (source: company press release)

Why We Like It:
We still believe that the intermediate trend for the markets, especially the NASDAQ is down. This recent strength has been nothing more than an oversold bounce and a set up for bears to pick new short positions. The same can be said for the SOX semiconductor index. Looking at a Point & Figure chart of the SOX we see the index in a sell signal pointing to a 368 target. If we combine a bearish trend in the NASDAQ, a sell signal in the SOX and a failed rally at resistance in BRCM it all adds up to a new bearish play. BRCM has been struggling for months. It's recent rally stopped right at resistance at the $31.00 level and its 200-dma. Now short-term technical oscillators are rolling over into new bear signals while its P&F chart is bearish with a $21 target. We are suggesting shorts at current levels with a target in the $27.00-26.00 range. However, readers should note that opening bearish positions in BRCM tomorrow (Thursday) does carry extra risk. The semiconductor billings data is due out on Friday morning. A positive number and the whole sector, including BRCM, could rally sharply. Obviously a negative number should hasten BRCM's decline. It's up to you on whether you open a short position tomorrow or wait until after the report on Friday.

Picked on April 27 at $29.90
Change since picked: - 0.00
Earnings Date 04/21/05 (confirmed)
Average Daily Volume: 7.9 million

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