Magic Software Stock: Rally Extends, Upside Potential Remains

Magic Software (NASDAQ:MGIC) has been rallying since November 2024, and the move has only strengthened in recent months. In this article, we break down what triggered the rally under the lens of the Adhishthana Principles and how the stock is positioned now that it has entered Phase 10 on the weekly chart.

Magic Software's Cakra Move and Breakout

According to the Adhishthana Principles, stocks often form a structure called the Adhishthana Cakra between Phases 4 and 8. This formation typically resembles a channel or arc pattern. A breakout from this structure in Phase 9 is considered a highly bullish signal, marking the start of the Adhishthana Himalayan Formation. This pattern consists of a sharp ascent, a peak, and a final descent.

Magic Software began forming its Cakra in August 2021, completing it in Phase 8 exactly in line with expectations. Near the end of this phase, the stock broke out of the Cakra and began its ascent. Phase 9, known for producing powerful rallies, delivered just that. Magic Software surged by roughly 93% during this period.

You can read our recent commentary on Resideo Technologies, which followed this same breakout pattern, here.

What Lies Ahead?

On August 11, Magic Software officially entered Phase 10 on the weekly charts. This phase is often where the peak of the Himalayan Formation begins to take shape.

"The 18th interval is expected to be the level of peak formation; if not, then the 23rd interval. If this phase concludes without forming the peak, it is anticipated to occur in the following phases."
— Adhishthana: The Principles That Govern Wealth, Time & Tragedy

For now, the rally remains intact, and momentum appears strong. The December-January period will be key to watch. If a peak forms during this window, the next stage of the pattern could begin. If not, the peak may be delayed until Phase 11.

Investor Outlook

With Magic Software still in the ascent phase of its Himalayan Formation, the bullish bias remains in place. Existing investors can continue holding, but caution is advised as the stock approaches the December–January window, when a peak could emerge. Strategic hedging during that time may help protect gains.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.