Fiat Chrysler’s 1Q17 recap
In 1Q17, Fiat Chrysler Automobile (FCAU) stock impressed investors by yielding ~19% in returns. Notably, the company has been able to improve its heavyweight vehicle sales over the past few quarters with the help of brands like Jeep and Ram. FCAU’s rising profitability and improving debt could be two primary reasons behind the recent optimism on Wall Street.
2Q17 begins on a weak note
Last week (ended April 7), Fiat Chrysler stock turned negative, however, and ended the week with a massive fall of about 7.4%. On April 3, the company had reported 5% YoY (year-over-year) fall in its March month US sales. Its 1Q17 sales fell by ~8% YoY. Such lower US vehicle sales could further hurt FCAU’s already low margins, which could be a key concern for investors in the near term.
We should note that last year, US auto sales (VCR) were at their highest level, with ~17.6 million vehicle units sold during the year. All mainstream automakers, including FCAU, General Motors (GM), Ford Motor (F), and Toyota Motor (TM), benefitted from this high auto demand, but the 1Q17 US sales data so far suggest that 2017 could be a challenging year for mainstream automakers.
As of April 7, FCAU’s stock was trading at $10.12. After posting an all-time high near $11.63 in February, it turned negative. In 2Q17, we can expect the $11.20 price level to act as an important resistance level. On the downside, no key support level lies before $9.45.
On the daily price chart, FCAU’s 14-day RSI (relative strength index) has entered oversold territory and is now at 28.3, reflecting weakening momentum.
Continue to the next and final part of this series for a closer look at Tesla’s recent price movement and key support and resistance levels for the week ahead.