Something unusual is happening this morning with the options trading in Marvell Technology Group (Nasdaq: MRVL). There has been a big increase in options activity and the implied volatility for the options has jumped up to 206%. That means that options players are expecting MRVL shares to soon make a huge move.
The technical analysis price chart suggests the same thing as the 200-day Bollinger Bands on it have been narrowing for the past several months. The stock has been trading in a narrowing range and a simple triangle pattern suggests a big move is coming. This means price action is aligned with options activity.
My guess is that the stock will end up falling, because technology stocks as a whole have been weaker over the past few days and the relative strength indicator comparing the price of MRVL to that of the S&P 500 has been in a downtrend all year. That means it’s lagging the market and will likely dump on any stock market pullback.
MRVL report earnings on August 23rd and is currently trading with a P/E of 23.45. It is currently paying a 1.12% dividend. Its next dividend date is in October.
Marvell Technologies is a semiconductor company and is in a sector that has seen several key leader stocks take hits recently. Intel stock fell hard on Friday and Micron shares have also been lagging the market for weeks. I am considering taking a short position in MRVL later today for a trade.
