Prudent investors that follow CANSLIM.net's reports would have been able to take advantage of this solid leader well before Friday's massive gap to the upside.  This stock was featured in yellow with an annotated DailyGraph(R) at $45.95 on October 31st, 2005 in the CANSLIM.net Mid-Day BreakOuts Report (read here).  This is exactly the type of behavior one would like to see after a company reports its earnings.  However, chasing extended stocks is something we continually caution investors about.  Since it is more than 5% above its pivot point, it is no longer considered buyable within the proper guidelines.

Marvell Technology Group Ltd. (MRVL +$6.55 or +10.30% to $57.04) exploded to the upside on Friday on a stronger than expected earnings report.  After the close on Thursday Marvel greatly exceeded analysts estimates.  MRVL more than doubled its Q3 income as demand surged for its micro chips.  The company reported that demand for its computer chips, used in hard disk drives and consumer electronics, surged last quarter.  

Marvell Technology Group Ltd. (MRVL +$1.08 or +2.24% to $47.10) has been heading towards the upper half of its 3-month base on increasing volume.  This stock is currently tracing out a base-on-base pattern, and a high volume move above its pivot point would trigger a fresh technical buy signal. 

Looking closer, it is worth noting that the stock actually gapped up above its 50-day moving average (DMA) line when it was featured on Monday, October 31st, 2005 in the CANSLIM.net Mid Day Breakouts Report and noted, "Solid reversal on Friday and moving up above its 50 DMA today with volume conviction (Two good signs). High ranks. First featured in the Aug '03 issue of CANSLIM.net News at $17.66."  This offered CANSLIM.net subscribers the ability to view a strong leader before it might break out above its pivot point and trigger a technical buy signal.  Two flaws to be somewhat concerned about are its low ROE of 11%, which falls shy of the 17% guideline, and signs of decreasing ownership interest from top-rated funds.  Disciplined investors will wait for a convincing breakout, rather than buying based on what they hope will they will see happen.  In the context of CAN SLIM™ stocks that might double and triple, it is not worth jumping in a dollar or two "early" without yet seeing proof of meaningful insitutional buying demand.  If MRVL is going to rise from $47 to $147 it must first rise through $48, $49, and $50, and investors would have the chance to see a technical buy signal and react accordingly.

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