These Auto Stocks Lost Their Shine Last Week

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Part 4
These Auto Stocks Lost Their Shine Last Week PART 4 OF 6

How Fiat Chrysler Stock Still Landed Near Its All-Time High

Fiat Chrysler stock

Last week (ended November 10), Fiat Chrysler Automobiles (FCAU) stock turned negative, posting a loss of 4.8%, compared with the previous week’s 5.8% rise. After last week’s weakness, the stock is now trading at a 3.6% loss so far in 4Q17.

Still, the company’s stock has gained 90.1% YTD (year-to-date) as of November 10, compared with the S&P 500 Index’s (SPY) 15.3% YTD gain.

How Fiat Chrysler Stock Still Landed Near Its All-Time High

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Notably, 3Q17 was the best quarter for Fiat Chrysler stock since it was listed on NYSE in October 2014. The stock registered massive gains of ~69.2% in 3Q17, though FCAU’s 2Q17 Wall Street performance was not any better than those of peers (XLY) General Motors (GM), Ford Motor (F), and Toyota Motor (TM).

Technical updates

As of November 10, Fiat Chrysler stock was trading at $17.27—not far from its all-time high of $18.33. This all-time high should continue to act as immediate resistance this week, and a violation of this could attract fresh buying. On the downside, no major support level lies above $16.45.

On the daily price chart, the 14-day RSI (relative strength index) indicators are moving downward, diverging from the stock’s price action. In general, RSI divergence with price action can be seen as an early indicator for a short-term price reversal or price correction.

Consistent improvement in profitability

In October 2017, Fiat Chrysler’s US sales continued to fall for the 14th month in a row, and sales fell 13% YoY (year-over-year) for the month. In the past few quarters, FCAU has been cutting its US fleet sales to rental car companies to improve profitability. In October, its US fleet sales fell 43% YoY, which hurt its total US sales for the month.

On October 24, FCAU announced its 3Q17 results. The company reported a 25% YoY rise in its 3Q17 EPS (earnings per share) to 0.59 euros (~$0.70). Due to weaker vehicle sales in North America, the company’s global revenues fell 1.6% YoY in 3Q17.

On the brighter side, FCAU continued to report solid gains in Latin America, where its revenues jumped 40% YoY.

Now let’s look at Ferrari stock’s recent price action.


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