Updates on EPA issue
According to a Reuters report published on May 19, Fiat Chrysler Automobiles (FCAU) has offered “to update software that it expects will resolve the concerns of U.S. regulators about excess emissions in 104,000 older diesels.” However, these updates still require approval from the EPA (Environmental Protection Agency) and the California Air Resources Board.
Earlier in January this year, the EPA alleged that Fiat Chrysler might be using hidden software to violate the Clean Air Act.
Other recent developments
On May 12, the company announced its decision to voluntarily recall over a million Ram pickup trucks in the US. Both the EPA allegations and the pickup truck recalls could affect the sales of the company’s Jeep and Ram brand models in the US.
Jeep and Ram pickup trucks are two key brands in FCAU’s US portfolio. While the Ram recall could potentially affect its sales, it will also add a huge recall-related cost burden to FCAU’s balance sheet. In addition, this massive vehicle recall has reignited a debate about vehicle safety regulations in the US.
Fiat Chrysler stock
In the week ended May 19, 2017, Fiat Chrysler stock traded on a negative note and ended the week at $10.50 with a ~3.4% weekly loss. The stock posted an all-time high near $11.65 on April 26, which should continue to act as a stiff resistance level. As of May 19, FCAU stock has lost about 7.7% on a month-to-date basis. The 14-day relative strength index is currently hovering at 43.9, suggesting weakening momentum. On the downside, a key horizontal support lies near the $9.50 price level.
Continue to the next part where we’ll learn about Tesla’s recent price movement and its key support and resistance levels for the week ahead.