Broadcom (AVGO) Shares Surge Nearly 10% on OpenAI Partnership News

Last month, news of a partnership with OpenAI served as a powerful bullish catalyst for NVIDIA (NVDA) shares. In October, a similar effect can be seen on the Broadcom (AVGO) chart.

According to media reports, the two companies have been collaborating for 18 months but are now making their partnership public. Their plans for 2026 include launching chip racks developed by OpenAI and based on Broadcom technology.

The rally in AVGO shares was further supported by:
→ President Trump’s conciliatory tone following his earlier remarks about imposing 100% tariffs on Chinese goods;
→ the prospect of a meeting between the Chinese and US leaders in South Korea at the end of October, as announced by US Treasury Secretary Scott Bessent.

Technical Analysis of Broadcom (AVGO)

Price movements in mid-2025 formed an upward channel (shown in blue). A strong earnings report in September triggered:
→ a bullish gap at the beginning of the month;
→ an extension of the channel, with the historical high (B) sitting near its upper boundary.

From a bullish perspective:
→ the price remains within the channel, confirming its validity;
→ the pullback to October lows following the A→B impulse can be viewed as a standard correction consistent with classic Fibonacci ratios of 0.5–0.618;
→ yesterday’s rally may represent a breakout of a bullish flag (shown in red) and an attempt to resume the upward trend;
→ within this context, the $315–325 zone appears to be key support for the bulls, while the 10 October low (marked with an arrow) may prove to be a bear trap.

From a bearish perspective:
→ in pre-market trading today, AVGO shares are slightly lower, suggesting the initial reaction may have been overly emotional;
→ the psychological $350 level continues to act as resistance — previous attempts to break above it have failed to hold.

If yesterday’s rally fails to gain traction, it could indicate underlying weakness in AVGO shares, which were unable to capitalise on strong fundamentals to sustain the bullish trend seen earlier in 2025.

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