Technical Analysis: BRCM Gapped down after a posting 2Q loss on $501M impairment charges. Currently BRCM is just sitting on the critical support level at about $27.00 (Dec 2012 low) and also the 161.8% Fibonacci Retracement Level.
Trading Plan: Wait another a few more days to see whether this support is strong and show sign of reversal pattern.
Trading Strategy: either Short Put Spread or Long Call
- STO BRCM Sept 13 30 Put
- BTO BRCM Sept 13 26 Put
- If break support, BTC BRCM Sept 13 30 Put to repair (1 month before expiry), else close both positions.
- BTO BRCM Sept 13 28 Call
- Close position one month before expiry date to minimize Time Decay.