General Motors YTD gains
General Motors (GM) has delivered a return of 6.9% year-to-date (or YTD) as of December 16, 2016. This return was much lower than the 10.5% return of the S&P 500 Index (SPY) during the same period, but it was still far better than the negative YTD performances of Ford Motor Company (F) and Fiat Chrysler Automobiles (FCAU).
Let’s find out if GM’s stock can sustain these YTD gains in the final two weeks of 2016.
Negative price action
In the week ended December 16, 2016, GM’s stock closed at $36.37 with a -3.4% return for the week. Strengthening domestic currency after the Federal Reserve’s rate hike decision may have been the primary reason behind this fall.
Note that a strengthening US dollar is likely to affect GM’s international profitability, and it could also benefit its competitors such as Toyota Motor (TM) and Fiat Chrysler.
Earlier this month, GM’s stock price breached a 21-month high of $37.45, posted in April 2015. In the following week, on December 12, 2016, it made a new high of $37.74. With the help of strong quarterly results and higher profitability, GM has been a consistent performer on Wall Street for the last two quarters. In 3Q16, GM’s stock rose ~12.3%, while in 4Q16 so far, it’s already trading at a rise of over 18%.
Key technical levels
Underlying strong momentum is still indicating bullishness in GM’s stock. On the upside, the stock’s price could continue to face stiff resistance near $38.10. A breach of this resistance could attract fresh buying in the stock, pushing it further upward.
On the downside, GM has a minor support level at $35.95, followed by a key support level near $34.90.
To learn about GM’s pension obligations, read Why Should Investors Care about Automakers’ Pension Obligations?
Continue to the next article to learn about Ford’s key technical support and resistance levels for the week.