Broadcom Inc. (AVGO) is having a rough week. After dropping almost 12% on Friday following its earnings report, the semiconductor giant continues to drift lower. But here's the interesting part: the stock is getting close to a price level that might actually put a floor under the selloff.

We're talking about support around $330, and it's why Broadcom deserves attention right now.

Let's talk about what support actually means. It's a price level where enough buyers show up to absorb all the shares that sellers want to dump. When a stock trends lower, it's because there simply aren't enough bids to soak up the supply. Sellers start undercutting each other to find buyers, and that's what creates a downtrend.

But stocks don't fall forever. They stop when they hit support, and for Broadcom, that level appears to be around $330. The chart shows this zone has held before.

Why does support work? One reason is remorseful sellers. These are traders who sold their shares at a certain price, watched the stock rally afterward, and kicked themselves for exiting too early. Some of them decide that if the stock comes back down to where they sold it, they'll buy it back at the same price. It's like getting a second chance.

So when the stock returns to that previously supported level, these regretful sellers place buy orders. If enough of them do this, you get support at that price again.

Sometimes stocks don't just stop falling at support—they actually bounce. You can see this pattern in Broadcom's chart. The $330 area has acted as a launching pad for rallies in the past.

What causes those bounces? Impatient buyers. These are the people sitting at support who get nervous that someone else will pay a slightly higher price and steal their shares. They know sellers will go to whoever bids highest, so they start nudging their buy orders up. Other impatient buyers see this happening and do the same thing. Before you know it, you've got a bidding war that pushes the stock into an uptrend.

That could be exactly what happens with Broadcom if it reaches that $330 support zone. The stock isn't there yet, but it's getting close. Whether support holds or breaks will tell us a lot about whether Friday's post-earnings plunge was an overreaction or the start of something worse.