The $6B Chip Sector Deal and 2 Drug Stocks Breaking Out

The confirmation of the Marvell-Cavium deal has semiconductor stocks on the rise

Managing Editor
Nov 20, 2017 at 2:21 PM
facebook X logo linkedin

U.S. stocks are trading cautiously higher this afternoon, with volume quiet ahead of the Thanksgiving holiday. Among the names making big moves are tech stock Marvell Technology Group Ltd. (NASDAQ:MRVL), plus biopharmaceutical companies DBV Technologies SA (NASDAQ:DBVT) and Intra-Cellular Therapies Inc (NASDAQ:ITCI). Here's a quick look at what's moving shares of MRVL, DBVT, and ITCI.

Marvell Jumps on Cavium Buyout

Marvell Technology is pulling the chip sector higher after announcing a $6 billion deal to buy Cavium (CAVM). MRVL is up 5% at $21.31, and earlier set a new six-year high of $21.58. Marvell shares have now gained more than 53% on the year, and they've taken out their prior 2017 peak of $21.08 -- a high set as recently as Nov. 6, right after The Wall Street Journal initially reported the potential CAVM tie-up.

Meanwhile, with MRVL earnings due out on Tuesday, Nov. 28, short-term options on the chip stock are relatively expensive. According to Trade-Alert, 30-day at-the-money implied volatility on MRVL stands at 33.3%, in the 70th percentile of its annual range.

DBVT Soars on Upbeat Drug Data

The U.S.-traded shares of DBVT are on the rise after the company reported that its peanut allergy drug, Viaskin Peanut, met the primary safety goal of a late-stage study. The stock is trading up 8.4% at $25.39, and is on pace to close above its 20-day moving average for the first time since its Oct. 23 bear gap -- prompted by poorly received efficacy data on Viaskin Peanut -- which carried the stock to a new two-year low of $21.51 less than a week ago, on Nov. 14.

Since that late-October sell-off, most analysts have remained bullish on DBVT, with seven brokerage firms out of nine still calling the stock a "buy" or better. However, since Oct. 20, the average 12-month price target on the stock has been slashed to $37.89 from $57.75.

ITCI Gets FDA Fast-Track Boost

Intra-Cellular Therapies stock is higher after its schizophrenia drug, lumateperone, received fast-track status from the Food & Drug Administration (FDA). ITCI was up 6.1% at $16.25 at last check, but upside today has been capped by the stock's formerly supportive 50-day moving average.

We're likely seeing a bit of a short-squeeze rally playing out for ITCI today. Short interest currently represents 14.3% of the stock's total available float, and at ITCI's average daily trading volume, it would take exactly 10 days for the shorts to cover all of their bearish bets.

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI