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Highlights

  • Magnis Energy Technologies Limited (ASX: MNS) shares are down nearly 45% YTD
  • The stock made a 52-week low of AUD 1.85 on Monday, 24 April 2023
  • On Friday, the stock ended with more than 5% gains

After making a fresh 52-week low of AUD 0.185 on Monday, 24 April 2023, Magnis Energy Technologies Limited (ASX: MNS) shares witnessed some recovery over the last two trading sessions. On Friday (28 April), the stock rose 5.128% on top of Thursday's 2.63% up move. However, the stock is still down around 45% on a year-to-date (YTD) (from 1 January 2023 to 28 April 2023) basis despite the gains seen in the last two days.

Today's gains in this vertically integrated lithium-ion battery technology and materials stock were seen after the company published its activities report for the January-March quarter of the current fiscal. MNS said it plans to set up an Anode Active Material (AAM) manufacturing plant utilising high-purity natural graphite feedstock from its wholly owned Nachu graphite project in Tanzania. During the quarter gone by, Magnis also paid the deposit for the first key piece of equipment with leading supplier Hosokawa Alpine Aktiengesellschaft for the AAM Demonstration Plant. This same equipment will be utilised in the full-scale AAM Plant.

The company also highlighted that it had signed an offtake agreement with a Tier 1 OEM EV manufacturer.

MNS further said that it signed a pre-payment subscription agreement with L1 Capital Global Opportunities Master Fund (a relegated party to SBC Global) and Regal Funds Management Pty Ltd, which saw it raise a total of AUD 25mn in the first tranche and a further sum of AUD 25mn can be raised in the second tranche. After fees and expenses, net

proceeds in tranche 1 were closer to AUD 22mn, which will be used to strengthen the company’s balance sheet, provide funding to iM3NY for plant productivity enhancements and additional working capital, funding of further engineering studies at the Nachu Graphite Project and engineering and feasibility studies at the AAM Project.

Will these developments help MNS shares end their downward trend? Let's study the stock's technical chart to understand its near-term trend.

MNS’s Technical Analysis:

On the daily chart, MNS's price is forming a positive divergence relative to the RSI (14-period), and the RSI is moving upward from the oversold region, indicating the possibility of a recovery in the stock in the near future. However, the 21-period and 50-period SMAs are above the current market price and may act as the resistance levels for the stock. Important support for the stock is located at AUD 0.185, while key resistance is set at AUD 0.225.

Daily Technical Chart – MNS

The technical levels for the stock were evaluated as per the closing price of AUD 0.205 per share as on 28 April 2023, up by 5.13%.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

The Green colour line reflects the 21-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 21-period, prices are currently in a bullish trend (Vice – Versa).

The Blue colour line reflects the 50-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 50-period, prices are currently in a bullish trend (Vice – Versa).

The Orange/ Yellow colour line represents the Trendline.

The Purple colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period), which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status, while a reading of 30 or below suggests an oversold status.