Spiraling Tech Stock Could Soon Stage a Comeback

MRVL is down over 20% since the start of the year

Deputy Editor
Jan 31, 2022 at 2:59 PM
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The shares of Marvell Technology Inc (NASDAQ:MRVL) have had a rough go of it so far in 2022 amid the broader market sell off, already shedding 20.5%. That's a far cry from Marvell Technology stock's December performance, when it hit an all-time high of $93.85 and added nearly 23% -- its best month since June and a big reason MRVL maintains a 35% year-over-year lead. There is plenty of reason to believe the stock could bounce back from its recent trough in the near future, however, as its latest pullback has placed the security near a trendline with historically bullish implications. 

Specifically, Marvell Technology stock just came within one standard deviation of its 200-day moving average, after staying well above this trendline for months. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, at least four similar signals occurred in the past three years. The equity enjoyed a positive return one month later in 75% of those cases, averaging a 5.5% gain. From its current perch, a similar move would put MRVL at around $74.

MRVL Chart Jan 31

It looks like options traders may be privy to the possibility of an impending price spike, per the security's Schaeffer's put/call open interest ratio (SOIR), which sits in the 22nd percentile of its annual range. This indicates short-term options traders have been more call-biased than usual. 

 

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