Replies to post #1908 on Marvell Technology Inc (MRVL)

[SyndicateTwo]

It's not certain, but if my counting is correct, then the 1.618% expansion target is around $22.50ish +/-. What then typically happens is you'll get a small ABC correction where the stock will retrace 38% on the A wave, retrace 50% of that move up on the B wave, and finally a C wave move down that equals the length of the A wave. I'm guessing all this takes about a week or two and takes the stock back on the C low to around the resistance level of $21.20 to $21.50. That would be a perfect scenario as a 'retest' of the old resistance to confirm it's now support. That then gets the bulls all giddy and they buy in mass and the stock then starts heading for the $30s next year as expected.

Will it happen that way? If you look at the chart I updated on the main board above shows, $23 is actually the next major resistance point. So, $23 could be the actual target and then you get the ABC from there. But it's still the same thing. Eventually after we breakout, we'll get a retest to $21ish. That's just how the market works.

The theory behind that is as you've seen MRVL hit $21.30 or so a few times now, each time it gets rejected there, that shows there are selling with stock to sell around that area. Why? Who knows. Typically that's telling you someone has a lot of stock with a cost basis right there and wants out at breakeven.

But each time you hit it, you absorb that much more stock. So, eventually you're going to break through with little stock for sale as it's been gobbled up the last few times it ran there.

But when you get the eventual break, the quick buck artists are just playing with it and adding to the power of the move. They eventually sell for profit and the 'investors' stop buying to see what's going to happen. If the stock falls back to that breakout point and fails (keeps going down), then you know you didn't absorb all the sellers there. If you bounce off, then you know there's a big buyer there who trusts, or has enough buying power to buy the pullback and confirm that any sellers in that area are gone.