Marvell Technology Stock Could Bounce Off Bullish Trendline

The security sports attractively priced premiums right now

Digital Content Manager
Jul 19, 2021 at 3:16 PM
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Semiconductor name Marvell Technology Inc (NASDAQ:MRVL) is up 1% at $54.51 at last check. While a catalyst for today's positive price action was not clear, Marvell Technology stock is fresh off a June 29, all-time high of $58.95, and boasts a healthy 49.1% year-over-year lead. MRVL has since pulled away from that peak, but this move lower may help shares move closer to their record levels over the next few weeks, as Marvell Technology stock is now standing near a trendline with historically bullish implications. 

Specifically, Marvell Technology stock just came within one standard deviation of its 40-day moving average, after floating above this trendline since May. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, nine similar signals have occurred in the past three years. Marvell Technology stock enjoyed a positive return one month later in 56% of those cases, averaging a 2.3% gain. From its current perch, a comparable move would put MRVL just shy of the $56 mark, which is closer to its June peak.

MRVL 40 Day

An unwinding of pessimism in the options pits would create additional tailwinds for Marvell Technology stock. This is per MRVL's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 91st percentile of its annual range. Echoing this, MRVL's Schaeffer's put/call open interest ratio (SOIR) of 0.85 stands higher than 98% of readings from the past year. In other words, both short-term and long-term options traders have rarely been more put-biased.

What's more, Marvell Technologies stock sports attractively priced premiums right now. MRVL's Schaeffer's Volatility Index (SVI) of 31% sits in the 11th percentile of readings from the past 12 months, indicating options players are pricing in low volatility expectations for MRVL at the moment.

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