Marvell Technology Inc (MRVL)

[SyndicateTwo]

Now, after doing much DD on this last night I have to come to the only conclusion that every reason I originally got into this stock 2 years ago is now coming true. That report is what we've all expected now for quarters.

So, I think it's time to start to light up this board again.

Technically, the stock has gotten way ahead of itself here. That gap has to be filled to some extent. What you want to do now is start buying slowly as it falls with the $15s being your target entry level. Big money doesn't pile into something unless they feel it's going to get away from them like AAPL or RIMM or GOOG.

I don't think MRVL is that. So, they won't have to pile in. They'll just average into it as it falls on a technical correction. But the $11 and $12 days should be over. The only issue like I said is the problem with this cycle high coming in June. As you all know, 80%+ of a stock's move is tied directly to the overall market condition. The cycles are saying we hit a high in June/July and then fall into the the Aug/Sep area and then rally big from then to April 2009 - at which time we have a mother of a cycle high that could lead to a major leg down into 2011ish. That would make sense based on the Presidential cycles and all this inflation problem having to eventually take its toll.

But for now, if MRVL can keep it up, the stock should easily see the $20s by year end. I have total exptectations that MRVL will be in the $20s in the 4th quarter this year. But what makes that even more interesting is the fact that a simple break of $17.50 on a CLOSING basis on volume puts the stock in a new long term uptrend having broken a multi-year downtrend.

I got an email about a year ago from someone who gave me a very detailed Elliotwave chart of MRVL which predicted $10 as a 4th wave low. I said no way. That was when the stock was at $22. Well, I stand corrected. I based on decision on strict fundamentals and fell for the problem that to defy the technicals is suicide. But the 5th wave projection projects actually into the $30s. So, we'll see.

But MRVL is now I think a damn good investment and any stong move over $17.50 makes this a near sure $20 stock.

Fundamentally though the PE is still a bit high. In this market you don't get premiums on multiples like you did before. So, any PE over 40 should be taken seriously. If you take the 11 cents they made (GAAP) and multiply that by 4, that's 44 cents for the year. Let's assume .50 for stronger future quarters. At .50, that's a pretty high PE now. So, I think there is no fear of missing the boat here.