Stocks

Unusual Options Activity In Marvell Technology

Marvell Technology Group Ltd. designs, develops, and markets analog, mixed-signal, digital signal processing, and embedded and standalone integrated circuits.  In a nutshell, Marvell is another player in the 5G space.

Marvell grew it networking business 60% year over year and with the acquisition of Cavium last year, now accounts for a little over 50% of the sales. 

Management believes that the company is entering a new product cycle driven by 5G, data center, automotive and enterprise markets and demand for their 5G products should increase in the coming quarters as deployments pick up.

I have been watching this stock since late March and really didn’t know why the Smart Money was bidding the price up through options.

On March 21st, the Smart Money bought a ton of the April call options with a strike price at $20.50.  At the time the stock was trading at $20.69.

On April 9th, the Smart Money bought a ton of the May 3rd call options with a strike price at $22.50.  At the time the stock was trading at $21.63. 

On April 11th, the Smart Money bought a ton of the April call options with a strike price at $22.    At the time the stock was trading at $22.64

Yesterday, the Smart Money was at it again. This time, they bought over 20, 000 June call options with a strike price at $28.  The have been right the last three time, no reason why they won’t be right again.

Nevertheless, lets go to the charts to see if there are any sellers between current price and the $28 level. The chart suggest the next several dollars higher will be a lot harder than the initial move higher as price will not have to contend with two weekly supply zones in front of price. However, the price for the Smart Money to be profitable sits right at the weekly supply at $28.50.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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