Marvell Technology (MRVL) Surges 12.32% on Bullish Momentum as RSI Hits Overbought 89.1

Marvell Technology (MRVL) has surged 4.64% in the most recent session, marking a 12.32% gain over two consecutive days. The stock's recent price action reflects strong bullish momentum, with key support levels at $65–$68 and resistance forming near $85. Candlestick patterns, including a bullish engulfing formation over the past two days, suggest continuation of the uptrend. The 50-day and 200-day moving averages are in a bullish crossover, with the price trading above both, reinforcing short-to-medium-term optimism. However, the RSI at 89.1 indicates overbought conditions, while Bollinger Bands show elevated volatility with the price near the upper band.

MACD and KDJ indicators align with overbought conditions. The MACD histogram is positive and expanding, signaling growing momentum, while the KDJ oscillator shows the K line at 80+ and the J line spiking above 90, suggesting a potential pullback. Divergence between MACD and KDJ is minimal, with both pointing to near-term exhaustion. Volume has surged alongside the price rise, validating the uptrend, though a drop in volume during a continuation could signal waning conviction.

Bollinger Band expansion highlights heightened volatility, with the price testing the upper band repeatedly. This suggests a strong short-term trend, but a contraction in the bands would likely precede a consolidation phase. Fibonacci retracement levels indicate critical support at $65.20 (61.8% retracement) and $59.70 (78.6% retracement), which could determine whether the rally sustains or corrects.

The RSI remains above 70, reinforcing overbought warnings, but in strong trends, overbought readings can persist. A sustained close below 60 would likely trigger a correction. Confluence between RSI divergence and Fibonacci support levels could offer high-probability entry points if the stock retests key levels.

Backtest Hypothesis

A strategy exploiting RSI oversold (below 30) and overbought (above 70) signals from 2022 to 2025 would have generated a 164.31% total return, outperforming the S&P 500 benchmark by 125.71% with a 76.06% CAGR. The strategy’s Sharpe Ratio of 1.06 and 0% max drawdown (despite 71.62% volatility) suggest robust risk-adjusted performance. However, the current overbought RSI and recent insider buying (e.g., CFO Willem Meintjes and President Sandeep Bharathi) indicate a nuanced approach: while the technicals signal caution, fundamentals and insider confidence may support holding through short-term corrections.