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What Drove Optimism for Mainstream Automakers in September 2017?

PART:
1 2 3 4 5 6 7 8
Part 4
What Drove Optimism for Mainstream Automakers in September 2017? PART 4 OF 8

Why 3Q17 Was the Best Quarter for Fiat Chrysler Stock

Fiat Chrysler stock

Last week, which ended September 29, 2017, Fiat Chrysler stock (FCAU) turned choppy after beating Wall Street for the previous six weeks. It ended last week with a minor fall of 0.70%.

Nevertheless, 3Q17 was the best quarter for FCAU since it was listed on the New York Stock Exchange in October 2014. It posted a massive rise of 69.2% in 3Q17 despite the dullness in the broader market (SPY). FCAU stock has risen 97.2% so far in 2017. Before looking at some possible reasons for those extraordinary gains, let’s take a quick look at its key technical levels.

Why 3Q17 Was the Best Quarter for Fiat Chrysler Stock

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It’s worth noting that in 2Q17, FCAU’s performance wasn’t any better than its peers (VCR) General Motors (GM), Toyota Motor (TM), and Ford Motor (F).

Key support and resistance

As of September 29, 2017, Fiat Chrysler stock was trading at $17.91, not far from its all-time high of $18.10 on September 22, 2017. A breach of this all-time high could attract renewed buying in the next couple of weeks.

Its 14-day RSI (relative strength index) indicator stayed in overbought territory with a reading of 79.1 on Friday, September 29, 2017. While an overbought RSI level is an indicator of underlying strength in momentum, it also increases the possibility of a downward price correction.

Fiat Chrysler stock could find an immediate support near $16.40 followed by the next support price level near $14.90.

Recent optimism

On August 21, 2017, a Reuters article suggested that Great Wall Motors, a Chinese auto giant, has confirmed its interest in acquiring some of Fiat Chrysler’s business segments. The possibility of an acquisition offer hasn’t been officially confirmed by FCAU, but that could still be a reason that Fiat Chrysler stock rallied in 3Q17.

Earlier in September, Reuters reported that Sergio Marchionne, chief executive officer of FCAU, said the company hasn’t received an offer from Great Wall Motors.

In October, you may want to watch the estimates for Fiat Chrysler’s 3Q17 results. The company will announce its results for that quarter on November 2, 2017.

In the next part, we’ll see how Tesla stock traded last week.

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