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Chart Advisor: Magna International Inc. (MG.TO)

Chart Advisor: Magna International Inc. (MG.TO)

Posted June 26, 2024 at 9:30 am
Investopedia
TSX

From SIA Charts

1/ Magna International Inc. (MG.TO)

2/ Candlestick Chart

3/ Point and Figure Chart

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1/

Magna International Inc. (MG.TO)

Courtesy of SIA Charts

SIA Charts’ relative strength rankings help investors manage risk by identifying stocks and sectors which are underperforming relative to their peers and/or their benchmarks and should potentially be avoided. Staying away from stocks that are not attracting capital can help investors to avoid areas at higher risk of absolute declines and relative underperformance and to reduce negative event risk.

SIA Charts’ relative strength rankings help investors manage risk by identifying stocks and sectors which are relatively underperforming in the short or long term to potentially be avoided as capital appears to be seeking better opportunities elsewhere.

Auto parts producer Magna International (MG.TO) is still stuck at the bottom of the rankings in the SIA S&P/TSX 60 Index Report. It has been in the Red Unfavored Zone for nine months now and it has been outside of the green zone since the summer of 2021. Since leaving the green zone in 2021, MG.TO is down 43.5% while the S&P/TSX Composite Index is up 6.7%. Since dropping back into the Red Unfavored Zone last September, Magna is down 19.5% while the Index is up 16.3%. Magna International (MG.TO) has been trending downward since peaking back in May of 2021, but in recent weeks, distribution has intensified. The shares had spent nearly 2 ½ years trending sideways between $60.00 and the $80.00-$85.00 area. At the start of this year, an attempt to break a long-term downtrend resistance line failed and since then, the bottom has increasingly been falling out.

2/

Candlestick Chart

In recent weeks, former support levels near $70.00 and then $60.00 have failed while volumes have increased, a sign of increasing selling pressure. Initial downside support appears near the $50.00 round number, followed by a measured $40.00 on trend. Initial resistance appears near the $60.00 breakdown point and then $65.00.

Courtesy of SIA Charts

3/

Point and Figure Chart

Point and Figure Chart Falls Through a Former Floor.

After selling off in early 2022, Magna International (MG.TO) settled down into a $60.00 to $80.00 range, well short of its previous highs, where it traded from 2022 to 2024. In recent weeks, distribution has resumed with the shares completing a bearish Double Bottom breakdown, then a series of Spread Double Bottom breakdowns, before finally taking out the old channel bottom to confirm the start of a new downtrend.

A convergence of vertical and horizontal counts suggests potential support may appear near $53.75, then previous lows near $51.70, then the $50.00 round number. Initial resistance on a rebound appears near $63.05 based on a 3-box reversal.

With a bearish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 0 out of 10, MG.TO is exhibiting short-term weakness across the asset classes.

Courtesy of SIA Charts

Originally posted 26th June 2024

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