Another Parabolic Short Entry: AVGO via AVS
By:TradingView
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The semiconductor melt-up has officially entered nosebleed territory. Just initiated a position in AVS (Direxion Daily AVGO Bear 1X ETF) to play the mean reversion in Broadcom (AVGO).
The data doesn't lie:
The Run: Since March 31, AVGO has ripped from an open of $299.39 to a recent high of $429.31. That is a 43% vertical move in 24 days.
Extension: We are trading at a massive premium to the 200-week SMA (currently $167.13).
The Strategy:
I’m skipping the puts on this one. When the chart goes parabolic, IV rank spikes, making option premiums prohibitively expensive. By using AVS, I get clean -1X exposure to the downside without fighting the Greeks or the 100+ IV Rank.
Targets:
S-1 ($374.01): The initial 23.6% retracement and first major support.
S-2 ($323.83): The 38.2% retracement, which aligns with the previous breakout structure.
This isn't about fighting the trend; it's about recognizing when the rubber band is stretched to the breaking point. Managing risk with a starter position. Stay tuned!
The data doesn't lie:
The Run: Since March 31, AVGO has ripped from an open of $299.39 to a recent high of $429.31. That is a 43% vertical move in 24 days.
Extension: We are trading at a massive premium to the 200-week SMA (currently $167.13).
The Strategy:
I’m skipping the puts on this one. When the chart goes parabolic, IV rank spikes, making option premiums prohibitively expensive. By using AVS, I get clean -1X exposure to the downside without fighting the Greeks or the 100+ IV Rank.
Targets:
S-1 ($374.01): The initial 23.6% retracement and first major support.
S-2 ($323.83): The 38.2% retracement, which aligns with the previous breakout structure.
This isn't about fighting the trend; it's about recognizing when the rubber band is stretched to the breaking point. Managing risk with a starter position. Stay tuned!
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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