stock
BorgWarner (BWA-N, Monday’s close US$53.06) declined from US$59.36 in 2014 to US$24.21 in 2016 (A–B), before rebounding to US$51.21 in 2018 (C). The stock then settled into a broad, horizontal trading range, fluctuating mostly between US$27 and US$48 (dashed lines).
The recent sharp rise above the upper boundary of this range signaled a breakout and the start of a new uptrend, with the potential for higher targets. BorgWarner became significantly overbought in February when it reached US$70.08 (D) and has since pulled back toward its 40-week moving average (40wMA), where it appears to have found support (E). Recent price action suggests the stock may be preparing to resume its advance.
There is solid support in the US$57–US$58 area; only a sustained decline below this level would weaken the current bullish outlook.
Point & Figure analysis yields an initial target of US$74, while the size of the prior trading range continues to support the potential for meaningfully higher levels over time.
Monica Rizk is the Senior Technical Analyst of the Phases & Cycles publication (www.capitalightresearch.com). Chart, courtesy of www.LSEG.com