Key technical levels
Previously in this series, we explored how General Motors’ (GM) valuation multiples are trading lower compared to its closest peer (IYK), Ford (F). While valuation multiples can help investors, it’s also important to look at key technical support and resistance areas.
Investors can use these support and resistance areas to refine their entry and exit from the company’s stock. Now, let’s look at GM’s important technical price levels ahead of its 4Q16 earnings event.
Support and resistance
As of January 31, GM’s stock is trading at $36.61. The company’s price has been moving in a descending price channel for the last couple of years, as we can see in the chart above. In November last year, the price breached the upper range of this price channel with strong underlying momentum.
The immediate horizontal resistance level for GM’s stock is near $38.15 with a stiff swing resistance near $41.5. On the downside, the price may find immediate horizontal support near $34.80 with a key support level of $32.40.
Upward stock price movements may see resistance around the resistance levels and downward price movements may hit a roadblock around support levels.
Auto industry’s 4Q16 earnings
Mainstream automakers (IYK) including Ford (F) and Fiat Chrysler (FCUA) released their 4Q16 earnings on January 26, 2017. While FCAU’s 4Q results reflected a consistent improvement in its margins, Ford’s fourth quarter results continued to disappoint investors. Read Ford’s 4Q16 Earnings: Another Disappointment? and Fiat Chrysler’s 4Q16 Results: Coasting Toward 2018 Targets? to learn more.