Wednesday the company closed on their acquisition of Inphi. Marvell is currently an Action Alerts PLUS holding.
When asked about the state of the semiconductor market, Murphy confirmed the supply-demand imbalance, noting that the demand for proprietary chips has never been stronger. He said the market continues to be driven by a surge in 5G wireless, cloud migration and strong innovation in the automotive sector.
When we last looked at MRVL on March 23 we wrote that, "The $50-$55 area is likely to cap MRVL's upside for now and further declines are possible in the weeks ahead. No change in strategy - continue to avoid the long side of MRVL."
Let's check out the latest charts of MRVL.
In the updated daily bar chart of MRVL, below, we can see that prices bounced after our March 23 review but gave back most of those gains. The slope of the 50-day moving average line has remained negative. The rising 200-day moving average line is still a positive as recent dips towards the line stopped short of testing it. This suggests that buyers are coming in sooner than expected.
The On-Balance-Volume (OBV) line is still pointed down from late January suggesting that sellers of MRVL are still more aggressive. On the plus side the OBV line has not made a new low for the move down. The trend-following Moving Average Convergence Divergence (MACD) oscillator is still above the zero line and its next move may be higher.
In the weekly Japanese candlestick chart of MRVL, below, we see a more constructive picture than we saw a month ago. Prices have made a number of lower shadows since the successful test of the rising 40-week moving average line. Lower shadows tell us that traders are rejecting the lower price areas.
The weekly OBV line is pointed down but it has been relatively weak since August and that has not stopped the longer-term uptrend. The Moving Average Convergence Divergence (MACD) oscillator is pointed down but has been narrowing in recent weeks.
In this daily Point and Figure chart of MRVL, below, we can see that the software is now projecting a potential upside price target in the $65 area.
Bottom-line strategy: In our last review we recommended standing aside. Today we need to be buyers of MRVL. Go long at current levels risking to $42. The $65 area is our first upside objective.