Sauté onion in oil for about 3 minutes. Stir in the flour, salt, ground pepper, tarragon, chicken broth and milk and cook until the mixture thickens, stirring constantly.
Add the chicken pieces to the mixture. Blend in the egg yolk, then lemon juice, sherry and bell pepper. Cook until chicken is heated through, about five minutes. Stir in the avocado and serve on toast.