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Technical analysis

Magna International Inc. is a Canadian mobility technology company for automotive manufacturers. It is one of the largest companies in Canada and was recognized in 2020 Forbes Global 2000.

#MGA after starting a bearish trend in June 2021, we believe the stock is consolidating between $ 79.00 - $ 75.00 to then gradually reversing to the upside. Positive catalyst could be the imminent break of the bearish trendline.

  • The stock is expected to break soon the downtrend line that began in June 2021

  • RSI is showing a positive divergence with the price: the new price lows were not followed by new lows in the RSI

  • MACD in positive divergence with the price: from the end of July the indicator has recovered strongly from a price that recorded new lows. Indicator that has also recently crossed to the upside

  • The price rebounded from the intermediate support at $ 72.30

To conclude, we believe that the recent fluctuations are anticipating a "bottoming" phase that will lead the stock to recover previous levels.

The oscillators MACD and RSI are diverging from the price together with a possibile break of the bearish trendline we are in favour of short-term upside.

Further confirmation will come when the price will mange to close above the 50MA.

Entry range $ 79.00 - $81.00*

Target 1 $ 94.00

Target 2 $ 104.00

OTB Global Investments

28 September 2021

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