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GM Stock Reaches Important Support Level: What Next?

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Mar. 14 2018, Updated 4:05 p.m. ET

GM stock

Last week, General Motors (GM) stock settled at $37.84. It posted a minor gain of ~1.1% from the previous week, when the stock fell sharply, by 8.5%. As of March 5, General Motors stock had fallen 3.8% in March. In February, the stock fell 7.2%, erasing its January gains of 3.5%.

In 2017, GM traded on a positive note and ended the year with a gain of ~7.7%. The S&P 500 rose 19.4%. According to US auto sales data for 2017, GM continued to be the largest auto company (XLY) in the country, placing ahead of Toyota (TM), Fiat Chrysler (FCAU), and Ford (F).

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Key technical levels

Last week, GM stock tested an important horizontal support level near $37.50, as shown in the chart above. Any violation of this support could attract renewed selling pressure. The price was hovering well below its 50-day SMA (simple moving average) of $41.66, confirming price weakness.

On the upside, an immediate resistance level lies near $39.60, followed by a key resistance near $40.80. Its 14-day RSI (relative strength index) score was well below the line of equilibrium at 33.5, suggesting weakness in the underlying momentum.

Recent updates

In February 2018, General Motors’ home market sales fell 6.9% YoY (year-over-year) to 220,905 units. In contrast, the company’s fleet sales rose 7% YoY due to a 15% jump in its commercial deliveries. GM’s US market retail sales remained weak, at 168,971 units, down 10.5% YoY.

Last month, GM reported its 4Q17 adjusted earnings, which stood at $1.65 per share, reflecting a 29% increase over 4Q16. The company’s stock rose 5.9% after the announcement, in which it beat Wall Street analysts’ expectations. Continue to the next part, where we’ll see how Ford stock has traded in the last few weeks.

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