By John Russell, reporter for OptionMonster.com.This story was originally published on RealMoney on April 16 at 5:53 P.M. EDT. Investors dumped chipmakers across the board on Wednesday after Intel ( INTC) failed to provide significantly bullish guidance, but there's still one name they like: Marvell Technology Group ( MRVL).
Most important, Marvell options are heating up. On Wednesday, traders were aggressively buying the near-the-money May calls, but those run the risk of expiring worthless if Marvell doesn't keep appreciating right away. A safer way to play the name is to purchase November $5 calls for $5.70. Marvell has done twice as well as the broader Nasdaq this month and has now halted around $10.30, an old support level that has become resistance. But with earnings expected out in early June, we expect Marvell to keep pushing higher. Last quarter it gapped higher on a bullish forecast -- that memory could give investors the confidence to keep buying it in coming weeks.