I’m Cautious on Marvell Technology Ahead of Earnings

Marvell Technology  (MRVL) develops and produces semiconductors and related technology, and the company is scheduled to report their latest quarterly financial numbers on May 26. A sell-side firm cut their price target to $90 from $110. I have no special knowledge of what they are going to report so let’s check out the charts and indicators.

In this daily bar chart of MRVL, below, we can see that prices have been weak since early December. MRVL is trading below the declining 50-day moving average line and below the cresting 200-day line.

The On-Balance-Volume (OBV) has been in a decline since early January and tells us that sellers of MRVL have been more aggressive than buyers for five months now. The Moving Average Convergence Divergence (MACD) oscillator is bearish but trying to generate a cover shorts buy signal.

In this weekly Japanese candlestick chart of MRVL, below, we see a mixed to bearish picture. Prices have been in a downward trend below the negatively sloped 40-week moving average line. There is a recent lower shadow but a bottom reversal pattern has not developed.

The OBV line shows a lot of weakness as does the MACD oscillator on this longer time frame.

In this daily Point and Figure of MRVL, below, we can see a downside price target in the $49 area.

In this weekly Point and Figure chart of MRVL, below, we can see a price target as low as $25.

Bottom line strategy: I am at a crossroad of sorts. On the one hand the charts of MRVL are bearish. On the other hand I see the broad market making a recovery rally for a few weeks. I am not sure which of these forces will dominate for shares of MRVL. Stay tuned.