Marvell (MRVL) goes into its earnings report with a high bar and shares up in pre-market trading. Nvidia (NVDA) is a hard act to follow, but its strong results may give MRVL a sympathy boost this morning.
Performance and sector position
Over the past year, MRVL is up 227-228%, far ahead of the SMH Semiconductor ETF at about 87%. In the data center infrastructure space, MRVL sits near the top. Many names in this area have shown strength. Qualcomm (QCOM) is the weakest, up only 2.5% on the year.
Chart read
On the yearly candle chart, MRVL fell from a high of 329.88 into a downward channel marked by two blue boundary lines. It has since broken out to the upside and formed a shorter-term upward channel between two white lines. It heads into earnings inside those boundaries.
Resistance sits at 252, a high point after a downside gap, which is also roughly where it topped about a week ago. Another similar gap and high near 298 marks more resistance. Support stands at 220 and 195.
The moving averages run from shortest to longest, spreading farther apart and all trending up, which points to the bullish uptrend staying in play with nothing to interrupt it now. The 5-day EMA is near 239; the 21-day EMA (teal) is near 225. RSI trends up above the 50 midline with no big moves, a common drift into earnings.
The volume profile shows heavier trading up near the highs, between 275 and 310. A smaller node sits at 160-173, and an even smaller pocket lines up with a range-bound stretch around 125-135. The closest node to the downside is 190-210, though it is not a very clear one.
Expected move and trade idea
For the August 28th weekly expiration, the expected move is plus or minus about 9.4% by tomorrow - a big number. The trade looks further out to the September 18th monthly, with an expected move of plus or minus 16.6%.
The idea is a simple long call vertical, betting on continued strength now that Nvidia (NVDA) has shown AI demand stays strong. The setup: long the September 18th 265/285 call vertical for a $5 debit, 22 days out.
- Max loss: $500 (the debit paid)
- Max profit: $1,500
- Risk-to-reward: roughly 1 to 3
- Break-even: 270, which is 5.9% to the upside
That break-even fits well within the expected move, whose upper edge is around 297, leaving some room beyond the short strike. The strike could be extended to capture more upside in exchange for paying a higher debit.
