What to expect from Magalu shares based on technical analysis?

The actions of Magazine Luiza (MGLU3) accumulated gains of 32% in November, reducing a large part of the losses in 2023, which now amount to 35% less. Last Tuesday (14), the stock underwent a major test, shortly after the release of the third quarter results.

If, on the one hand, the company recorded net profit, helped by tax creditson the other hand, reported on balance sheet problems, which reduced his net worth. As a result, the share opened down 10%, recovered throughout the sessionclosing with a slight increase.

Between the minimum and maximum, the stock went from R$1.55 to R$1.79, a range of 15%. At the end of the session, the share ended at R$1.76, an increase of 1.73%.

To understand what to expect from Magazine Luiza’s actions (MGLU3), o InfoMoney consulted Leandro Petrokas, research director and partner at Quantzed. Check it out below!

MGLU3: Technical analysis Magazine Luiza

For him, with the close of the 14th, prices managed to surpass the 9- and 20-day moving averages, with a high volume traded.

This demonstrated, according to him, that there was a strong entry of buyers into the asset, as it opened on a decline, recovered and ended the day in a positive light.

“So, can we now say that it is a festive atmosphere and that the upward trend is complete? Not yet! But there is no doubt that we are facing a process of reversing a trend from bearish to bullish,” she says.


According to him, using the Dow theory – recommending that an upward trend begins with an upward pivot, that is, a sequence of tops and bottoms at higher levels –, “we need a close above the last top in R$ 2.00.”

Magazine Luiza: daily chart


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MGLU3;  swing trading;  technical analysis;  graphical analysis;  Magazine Luiza
Source: Nelogica: Prepared by: Leandro Petrokas

“Another reading would be the formation of a figure from classical technical analysis that is the ‘bullish flagpole’ [veja no gráfico acima]. This figure has 2 main elements: a directional, rapid and expressive movement in one direction (high between 01 and 08/11) and a correction in a channel against the previous movement (correction between 09 and 14/11)”, he adds.

In this sense, he points out, when analyzing the weekly chart [que segue abaixo]the eventual trend reversal is still a long way from happening.

“With the recent rise in shares, prices once again tested the 9-week moving average, which is an important element of resistance. In this context, we are still facing a rebound within a downtrend”, he points out.


Magazine Luiza: weekly chart

MGLU3;  swing trading;  technical analysis;  graphical analysis;  Magazine Luiza
Source: Nelogica: Prepared by: Leandro Petrokas

However, he continues, after a decline that lasted practically 14 weeks, “it is natural that this reversal will take a significant amount of time to occur.”

What to expect from Magazine Luiza’s shares?

In summary: in the short term, Petrokas assesses that we should observe the eventual exceeding of the R$ 2.00 range, “which is the current watershed for the action. If this happens, the asset will open up space to reach R$2.20 and then R$2.45, which are price memory points from the past.”

“If the movement of the last session (14/11) was just a ‘flight of the chicken’, that is, a one-off movement that soon tends to end, we will see this on the 16th and 17/11”, he adds.


Finally, he highlights that, depending on the asset’s behavior, this rest of the week, we will have a clearer view of buyers’ real appetite.

“We will keep an eye on the R$2.00 range. At this price level, the fight between buyers and sellers should be good”, he concludes.

The post first appeared on www.infomoney.com.br

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