Magna Looks Hot as Lava
- Posted by Greg Harmon
- on December 6th, 2012
The auto sector has been heating up with sales run rates approaching 17 million units or more from the big guys. While Ford, $F and GM, $GM, have their issues many traders are looking to suppliers are the way to play the space. One that grabs very little attention is heating up like hot rocks, lava, magma. Magna International, $MGA, is awakening from a dormant state and about to erupt on multiple time frames. Take a look.
The daily chart above shows that the stock has been moving a long a channel between 43 and 47 since September began. It becomes interesting as the Relative Strength Index (RSI) is heating up, making new higher highs with a positive Moving Average Convergence Divergence indicator (MACD) as it heads into the top of the channel. These support continued upside price movement. A break above the channel carries a Measured Move higher to 53. On the weekly picture a nearly
2 year Inverse Head and Shoulders pattern is triggering. The price objective of the pattern is a move to at least 68.40. The RSI and MACD on this timeframe also support further upside price action. And it just gets better when zoomed out to the monthly picture below. The symmetrical triangle breakout that is occurring now carries a target on the pattern to 77. And this timeframe also has support from a bullish RSI and a MACD about to cross to positive.
So to recap the targets are 53, 68.40 and 77. For a $47 stock that nobody is watching that is quite a move.
Join the Dragonfly Capital Views Premium Membership
Sign up here to get deeper analysis and nearly 50 trade ideas every week.
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- The History of the World of Stocks and Bonds
- NYC Traders EXPO February 21-23
- Earnings Trade Ideas for Twitter
- Premium Earnings 2-10-16
- Is the Bond Run About to End?
- Premium Earnings 2-9-16
- The Head and Shoulders in the Nasdaq Looms Large
- Stalking an Entry on Constellation Brands
- Premium Earnings 2-8-16
- Top Trade Ideas for the Week February 8, 2016: Bonus Idea