In his second "Executive Decision" segment of Mad Money Monday night, our own Jim Cramer also sat down with Matt Murphy, president and CEO of Marvell Technology Group Ltd. (MRVL) , a technology company at the heart of the coming 5G wireless transition.
Murphy explained that platform leaps like 3G, 4G and now 5G are long, 7-to-10-year cycles and the 5G cycle is only beginning now. To be successful, you need expertise in processors, storage, networking and security -- all of which Marvell excels at. That's why they are well positioned to be a leader in the U.S. 5G market.
Let's check out four high-speed charts and some indicators.
In the daily bar chart of MRVL, below, we can see that prices made their low in late December like many companies. Unlike most stocks, MRVL rallied to retrace the fourth-quarter decline and more. Old resistance in the $21-$22 area from last June and July was overcome and the pullback in May was back to that area which is now acting as support. Prices are back above the rising 50-day moving average line and the positive 200-day line. In March we can see a bullish golden cross as the 50-day average crosses above the slower-to-react 200-day average.
The daily On-Balance-Volume (OBV) line shows a rise from September and tells us that buyers of MRVL have been more aggressive for several months -- even during the August-December weakness.
The trend-following Moving Average Convergence Divergence (MACD) oscillator just crossed to the upside from below the zero line for a cover shorts buy signal. An outright go long signal is poised to happen soon.
In the weekly bar chart of MRVL, below, we can see that prices are above the rising 40-week moving average line. Trading volume looks like it has increased the past year but the weekly OBV line is lagging the price action so far this year.
The weekly MACD oscillator narrowed in April and May but did not cross to a take profits sell signal.
In the monthly bar chart of MRVL, below, we want to focus on the action from 2006. I believe this is a large base or consolidation pattern with the neckline around $25. A monthly close above $25 should be a strong signal to buy.
This stock is overbought but that is not unusual when a stock is near a breakout point. Investors with foresight will continue to buy even if it has run up too fast.
In this Point and Figure chart of MRVL, below, we do not have as much price history as the monthly bar chart but the software is projecting a first price target of $30.50. A trade at $26 should refresh the uptrend.
Bottom-line strategy: I just presented four bullish charts on MRVL. Traders and investors should consider going long MRVL at current levels and on strength to $26. Risk below $20.50. $30.50 is our first price target. From there $35 would be next.