Marvell Technology Gains 3.08% on Four-Day Rally as Technical Indicators Signal Uptrend

Marvell Technology (MRVL) has experienced a 3.08% gain on the most recent session, extending a four-day winning streak with a cumulative 6.59% rally. This recent momentum suggests strong near-term buying pressure, though the sustainability of this trend requires deeper technical validation. The price action has formed a bullish pattern with consecutive higher highs and lows, potentially signaling a continuation of the uptrend. Key support levels can be identified at $66.14 (a prior swing low) and $63.33 (a prior reaction low), while resistance is likely to emerge at $68.52 (a recent overhead level) and $70.98 (current price).

Candlestick Theory

The recent price action includes a strong bullish engulfing pattern on September 16 and a morning star configuration on September 15, both indicating potential trend continuation. However, the price has yet to break above the $72.41 high from September 17, which could validate a new short-term resistance. A breakdown below $67.43 (a prior pivot level) would trigger retesting of the $66.14 support.

Moving Average Theory

The 50-day moving average (approximately $70.50) is currently below the 100-day ($71.20) and 200-day ($72.00) averages, suggesting a flattening trend in the intermediate term. The price has crossed above the 50-day MA, indicating short-term bullish momentum, but the long-term averages remain bearish. A crossover of the 50-day MA above the 100-day would strengthen the case for a sustained uptrend.

MACD & KDJ Indicators

The MACD histogram has shown positive divergence, with the line rising despite a flattening price, hinting at strengthening momentum. The KDJ (stochastic oscillator) is in overbought territory (K at 85, D at 75), suggesting a potential pullback. However, the RSI (discussed below) remains below overbought levels, creating a confluence of mixed signals. A bearish crossover in KDJ could precede a retracement to test the $67.35 level.

Bollinger Bands

Volatility has expanded recently, with the 20-day Bollinger Bands widening to a range of $68.36 to $72.41. The price is currently near the upper band, indicating stretched conditions and a higher probability of a near-term correction. A retest of the lower band ($68.36) would confirm the continuation of a consolidation phase.

Volume-Price Relationship

Trading volume has surged in tandem with the recent rally, particularly on September 16 and 17, with volumes exceeding 29.5 million shares. This supports the validity of the price action. However, a sharp decline in volume during an upward move could signal weakening conviction. Divergence between volume and price (e.g., higher prices with lower volume) would raise caution.

Relative Strength Index (RSI)

The 14-day RSI is at 68, approaching overbought territory but not yet triggering a sell signal. This aligns with the MACD’s positive divergence but contrasts with the KDJ’s overbought warning. A drop below 50 would indicate waning momentum, while a move above 70 would confirm overbought conditions, increasing the likelihood of a pullback.

Fibonacci Retracement

Key Fibonacci levels from the recent $61.72 to $72.41 uptrend include 23.6% at $69.30 and 38.2% at $68.30. The current price near $70.98 suggests a potential retest of the 23.6% level as a near-term target. A breakdown below the 50% retracement ($67.06) would invalidate the bullish case.

Backtest Hypothesis

A backtest of a MACD golden cross strategy (buying on the 12/26 EMA crossover and holding for 10 days) yielded a CAGR of -15.22% and total returns of -44.72%, underscoring its ineffectiveness in this context. The poor performance correlates with the stock’s recent overbought conditions and lack of follow-through in volume. This suggests that relying solely on MACD signals without considering RSI, Fibonacci levels, and volume dynamics may lead to suboptimal outcomes. Integrating these indicators—particularly RSI divergence and Bollinger Band positioning—could refine entry and exit points, mitigating the risk of false signals.