Slicing Off a Portion of This AI Holding After Big Gains Drive Overextension
There are many positives of late for the holding, but also little question that the shares are overextended.
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| Symbol | Transaction Type | # Shares Traded | Recent Price $ | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
MRVL | Sell | 110 | $158 | 1,110 | 3.0% |
After you receive this alert, the Pro Portfolio will sell 110 shares of Marvell (MRVL) at or near $158. Following the trade, the Portfolio will own 1,110 MRVL shares, roughly 3.0% of Portfolio assets.
In our comments earlier on Wednesday, we discussed the latest string of positive data points for AI chip demand, especially custom AI chip solutions offered by Marvell. These build on other similar data points and signals, pushing MRVL shares not only higher, but deeper into an overbought condition.
As you can see in the chart below, the current relative strength index (RSI) level is more than 87, and in the chart below that the RSI level for the Technology Select Sector SPDR Fund (XLK) has crossed over 78.
That combination is leading us to ring the register yet again and lock in another significantly profitable trade on this slug of MRVL shares after we lifted our target to $160 earlier on Wednesday.
We do see rising digital infrastructure needs benefitting MRVL shares as well as those for Broadcom (AVGO) and Nvidia (NVDA) , but following that string of positive developments, it’s fair to say MRVL shares are overextended in the near-term. It also means that it very well may not take much negative news to spur some profit taking following the almost doubling of the shares from late February levels. With that in mind, we reiterate our Two rating on MRVL shares.
Related: Asia's Worst Performer Slumps Again as MSCI Refuses to Remove Shackles
More Pro Portfolio
- Ringing the Register on Marvell Again and Adding to Another Holding
- We're Tracking 25 Signals Across 10 of Our Investment Themes
- Weekly Roundup: Widening Our Lead... But Storm Clouds Are Brewing
(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)At the time of publication, TheStreet Pro Portfolio was long AVGO, and shares.
At the time of publication, TheStreet Pro Portfolio was long MRVL, AVGO and NVDA.
