Hey traders, I’m putting Broadcom ($AVGO) front and center today because it is going to officially step into its “Hot Zone” on Friday, May 1st — and the historical edge here is something to pay attention to.
This is a core portfolio position for me right now — one of my largest long-term holdings and one of my favorite swing trades heading into earnings.
Broadcom in the Earnings Hot Zone
Here’s exactly why I’m bullish: Check out my “Hot Zone” Stats (8 quarters analyzed)
- Beat estimates 8 out of 8 times — never missed once
- Pre-earnings 21-day average move: +5.48% ($21.91)
- Pre-earnings 8-day average move: +2.73% ($10.93)
- Post-earnings 8-day average move: +6.46% ($25.82)
- Average earnings gap UP: +11.5% ($46.03)
- Average earnings gap DOWN: just -4%
Look at the chart I posted — you see the vertical green “Hot Zone” bars where the stock has consistently ripped higher right before the report. We are sitting at $402.54 today.
An Upcoming Pre-Earnings Momentum Move
If the 21-day seasonal average holds, we’re looking at roughly $424 by the time earnings hit in early June, but I also have a higher price target of $450.
If the 8-day average fires off once we’re fully inside the zone, that’s still a fast $10–11 move in just a few trading days.
Extra tailwinds I love:
- IV Rank is only 18% — options are still relatively cheap for this kind of directional move
- The stock is in a strong technical uptrend and holding above the key moving averages
- Broader AI momentum is still red-hot (especially with today’s Big Tech earnings backdrop)
My Positions
My actual positioning (what I’m doing right now):
- Core long stock position — one of my biggest holdings in the portfolio
- Options overlay: I will look to add long calls or butterflies in this Hot Zone window
- I prefer to buy dips toward the 8-day and 21-day exponential moving averages — that’s my defined entry zone
Risk management (because I never trade without it):
- Stop below the recent swing low (~$380–$385 zone)
- Defined-risk spreads on the options side, so I can sleep at night
- I’m sizing this as a 3–5% portfolio risk trade max (standard for me on these seasonal setups)
Bottom line: If you’re looking for a stock that combines:
- Real AI infrastructure exposure
- Proven earnings history
- Seasonal tailwind
- Still-reasonable implied volatility
…then $AVGO is it. Chart is attached — zoom in on those Hot Zone bars and the gap statistics. If you want the exact options strikes/expirations I’m using, join me in the Mastering the Trade room at Simpler Trading.
