Bermuda-based semiconductor company Marvell Technology Group (MRVL) staged a promising breakout move on Tuesday, Nov. 5, on the back of the announcement that private equity firm Kohlberg Kravis Roberts & Co. (KKR) acquired a nearly 5% stake in the chipmaker.

Before the news was released, based on Marvell's market cap at Monday's close, a 5% stake in the company would have cost about $296 million. One source, who asked not to be identified, said KKR views MRVL as undervalued and had conversations with the firm's CEO, Sehat Sutardja.

The involvement of KKR, a firm that is known for its successful leveraged buyouts, now also makes such a move a possibility with MRVL. Other major holders of the stock are the CEO and his brother, with a combined 20% stake, and David Einhorn's Greenlight Capital, which owns 9%.

On the back of this news, RBC Capital discussed that it sees a leveraged buyout of the company as something that could work in part because of Marvell's high cash returns, as well as its tax advantages. RBC said it sees a possible leveraged buyout offer (LBO) happening in the $16-$18 price range.

Additionally, Standpoint Research upgraded the stock from a "hold" to a "buy" as a result of the KKR stake.

For the retail trader to get involved in the stock here, it will be important to closely follow how this story unfolds and to react quickly in case any major shareholder jumps ship.

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From a price action point of view, MRVL looks to have plenty of upside left in the near term, and traders could consider building a long position at current levels.

To get a better feel for the stock's current juncture, though, let's take a look at the multiyear chart.

Going all the way back to 2006, we can draw a simple line of resistance by connecting the 2006 and 2011 highs. The stock is bumping up against this long-term resistance right now.

A more official sounding remark about a LBO would likely result in a major multiyear breakout. Momentum, as measured by Wilder's Relative Strength Index (RSI), still has plenty of upside left, which further supports a potential break higher. And finally, MRVL developed a constructive higher low in late 2012, versus its late 2008 lows, which from a pure price action point of view begs for the stock to make a higher high.

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While the weekly chart above gives us some broad bullish support for higher prices that could occur if a LBO were to come to fruition, the clearer price levels to focus on are better seen on the daily chart below.