Price Forecast:

Bullish Case: MRVL's strong AI and data center segments, coupled with higher-than-market implied volatility, suggest significant upside potential. Momentum from recent earnings announcements could propel the stock toward $95 in the short term.

Bearish Case: The market's low trading volume and flat implied volatility structure raise concerns about MRVL's ability to sustain growth, especially amid rising competition and potential margin pressures, risking a drop toward $85.

Potential Outcomes:

1. Positive earnings drive price to $95 (30%);

2. Margin compression leads to $85 (40%);

3. Demand for AI boosts stock to $100 (25%);

4. Supply chain issues hinder growth, dragging it to $80 (5%).

Trading Oracle: Engage in a bullish strategy using credit spreads by selling 5 $90 puts and buying 8 $86 puts. With a 60% probability of profit and anticipated upside, this trade capitalizes on MRVL's strong position and high implied volatility. Target a quick turnaround in the next 10 days for maximum gains.

November 21, 2024