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What’s Driving Honda Higher on Wall Street in 1Q17?

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Honda Motor Company

Honda Motor Company (HMC) is the second-largest Japanese automaker, and North America is its largest market for Honda. In 2016, North America accounted for 56% of the company’s total revenues. As a Japanese automaker, the company reports its annual results from April to March.

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Honda on Wall Street

Through March 21, 2017, Honda stock has risen ~5.5% in 1Q17 so far. This performance is much better than the Wall Street performance of other mainstream automakers that we’ve discussed so far in this series.

It’s important to note that in January and February 2017 combined, Honda’s US sales rose 3.9% against a 1.4% fall in the US total sales. During the same period, Honda’s US truck sales have trended up with an 18.1% increase while its US car sales have dropped 8.7%.

This increase in Honda’s truck sales also reflects optimism for the company as trucks tend to yield higher profit margins than small cars. These factors justify Honda’s recent Wall Street gains.

Key technical levels

Currently, Honda is trading at $30.79 and is hovering right above an important support level of $30.70. Only a sustainable breach below this level could attract renewed selling pressure. On the upside, a swing high near $32.17 could act as an immediate resistance level.

To learn what Wall Street analysts are estimating for auto stocks (XLY) such as General Motors (GM), Ford (F), and Tesla (TSLA), please read Mixed Bag for Auto Stocks: Analysts’ Recommendations in March.

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