MRVL Stock: Onward and Upwards
Oh my, the Nasdaq index has just created a new all-time high, which means that the market turmoil that caused this index to plunge a few weeks back has been completely dismissed and higher prices have indeed prevailed. For those who have been following my reports, this is exactly what I perceived would happen, and therefore, it should not really be shocking news.
This is not the first time I have made the right call, nor will it be the last, and since I have decided to gloat in this report, I am going to focus on Marvell Technology Group Ltd. (NASDAQ:MRVL) stock, because back on May 30, 2017, I had the foresight to suggest in a report that Marvell stock was primed to make a move toward much higher prices. The title of that report was “Systems Check Complete, Marvell Stock Is Ready for Liftoff,” which in itself is a bullish statement implying that Marvell stock was rocket ship ready for liftoff.
The basis for this report was the completion of a very large and powerful technical price pattern, which suggested that a very large and powerful move toward higher prices was likely to follow. The implications of this pattern did not disappoint because MRVL stock has appreciated, but the great news I have to share is that this perceived move is still in development, and therefore, more gains are on the horizon.
The technical price pattern responsible for suggesting that Marvell stock was set to appreciate is highlighted on the following MRVL stock chart.
Chart courtesy of StockCharts.com
The technical price pattern highlighted on the Marvell stock chart is a very large symmetrical triangle.
Symmetrical triangles develop when the price action is characterized by a sequence of lower highs and higher lows. Connecting this sequence creates two converging trend lines, where each respective trend line represents a level of price support and a level of price resistance. The completion of the triangle price pattern is dependent on a break above resistance or support, and the stock price is expected to accelerate in that direction.
Symmetrical triangles are among my favorite technical price patterns because they are known to produce especially powerful breakouts. The power generated from this pattern is a result of the contraction of space between price support and price resistance that is created as the pattern develops. This dynamic causes energy to build within the pattern as traders position themselves in anticipation of whether the trend line representing support or the trend line representing resistance is going to fail.
The size and scope of the move that follows is directly related to the size of the pattern, and the triangle pattern on the MRVL stock chart is of epic proportions, so an epic run can be expected once it is completed.
In January 2017, MRVL stock exited the symmetrical triangle by breaking above the trend line that outlined price resistance and Marvell stock has appreciated to the tune of 67.60% since that date.
I stated earlier that I believe that this move toward higher prices has further to run because the recent price action supports the notion that higher prices are still in development.
This price action I speak of is highlighted on the following Marvell stock chart.
Chart courtesy of StockCharts.com
This MRVL stock chart illustrates that a significant level of price resistance prevented the stock price from advancing. This level of price resistance resided at $24.15 and was first established in November 2017.
This level of price resistance thwarted all attempts to move beyond it for three months, and on March 8, 2018, MRVL stock gathered enough strength to break above it.
Now that resistance is broken, Marvell stock has been set free to appreciate, and higher stock prices are once again in development. The repercussions implied by the completed symmetrical triangle are still in play, and the epic move toward higher prices has yet to run its course.
I continue to be bullish on Marvell stock because the price action continues to support the notion that higher MRVL stock prices are in development. I will maintain this view until there are indications suggesting that another view is warranted.