Marvell Technology Group Ltd. (MRVL) Stock Moves Down and Here’s Why

Marvell Technology Group Ltd. (NASDAQ: MRVL) shares fell on Monday Dec 5 with lower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a downgraded rating.

Meanwhile, the Dow Industrials on Monday opened at an all-time high as investors dismissed concerns about the outcome of Italy’s referendum on Sunday.

The Dow Jones Industrial Average rose DJIA, +0.41% 85 points, or 0.5%, at 19,260, the S&P 500 index SPX, +0.42% began trade 9 points, or 0.4%, higher at 2,201, while the Nasdaq Composite Index COMP, +0.43% advanced 27 points, or 0.5%, at 5,282.

Analysts at Goldman Sachs Group Inc. downgraded shares of Marvell Technology Group Ltd. (NASDAQ: MRVL) from Neutral to Sell in a research note to investors today. With a rating of Sell on the shares, Marvell Technology Group Ltd. has a 52-week high of $14.99. A number of other analysts have issued reports on the stock in recent days, and the company has earned a consensus one-year price target of $15.46, higher than the opening price of $13.59. Material and fundamental changes in the company’s procedures, future direction or industry can cause downgrades as the analysts consider that the future prospects for the security have weakened from the original recommendation.

Marvell Technology Group Ltd. (NASDAQ: MRVL) shares last traded at $14.00, which represents a drop of $0.02 per share or -0.14% from the previous closing price. Opening at $13.59, they varied from $13.59 and $14.06 throughout the day.

Marvell Technology Group Ltd. (NASDAQ: MRVL) currently has a market cap of 7.16B.

Marvell Technology Group Ltd. (NASDAQ: MRVL) Average Daily Trading Volume

The stock’s average daily volume is 5,396,410 shares out of a total float 394,178,000 and some 1,621,407 shares traded hands yesterday, lower than the norm. Trading volume is likely to increase in the next few days as momentum traders often use upticks in trading volume to pinpoint large volume aggregation or distribution by institutional investors.

While higher trading for one day will not mean much, conversely, a trend of heavy trading volume on the buy side over a period of days or weeks expresses a positive indicator to market traders that institutions may be moving in, so institutional sponsorship is critical.

Institutional sponsorship commonly refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.

Institutional investors such as these retain teams of analysts researching thousands of stocks, so it is good confirmation to see them buying a stock you are considering.

Marvell Technology Group Ltd. (NASDAQ: MRVL) Moving Averages

A moving average can also act as support or resistance. In an uptrend a 50-day, 100-day or 200-day moving average may act as a support level, as shown in the figure below.

This is because the average acts like a floor (support), so the price bounces up off of it.

In a downtrend a moving average may act as resistance; like a ceiling, the price hits it and then starts to drop again.

By identifying trends, moving averages allow traders to make those trends work in their favor and increase the number of winning trades.

With that in mind, Marvell Technology Group Ltd. (NASDAQ: MRVL) now has a 50-day MA of $13.28 and 200-day MA of $11.74. It has traded in a 52-week range between $7.40 – 14.99 and today’s last price is 6.64%% lower than the 52 week high of $14.99.

Earnings growth is a critical factor to consider when buying stocks and investors watch for companies that have raised their earnings by at least 25% for the past 3 years.

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