Broadcom Corporation (Nasdaq:BRCM) – Launch Of Ground Breaking Chip

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This evening, BRCM - Google Finance" href="http://www.google.com/finance?q=NASDAQ:BRCM">Broadcom Corporation BRCM released the following announcement about the development of the first 40nm Wi-Fi and Bluetooth combo chip.

The press release included the following commentary from management:

John DaCosta, Director of Product Marketing, Mobile & Wireless Group, Broadcom Corporation:

“The future of innovation in consumer electronics is in wireless connectivity.  By extending Broadcom's leadership in wireless integration to the 40 nanometer node, we're delivering the most cost effective and industry proven integrated solutions to the PC segment.  By leveraging Broadcom's leadership in Wi-Fi Direct and software APIs, Broadcom is enabling PC OEMs to develop and deliver new and compelling solutions to their customers.”

The news is clearly a ground breaking development and there should be a strong reaction from the market on Tuesday morning.

The above chart shows that there has already been quite a strong bounce in the stock price last week. From Thursday's open at $33.10, there has already been a hefty 10% gain on Friday's close of $36.52.

The 10% swing over the past two trading days can be attributed to a broker report which stated that the company was leveraged to strong wireless baseband demand. Today's announcement of the development of the new chip will only add to that rationale.

From a charting perspective – a strong reversal has already developed. Also, Friday's jump saw the chart develop a gap, and this gap higher can be considered to be a very bullish signal.