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Key Technical Levels in GM Stock for the Third Week of March

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GM stock

In the week that ended on March 16, 2018, General Motors (GM) stock settled at $37.94 with a minor gain of ~0.3% compared to the previous week’s closing price. In the previous week, the stock also rose 1.1%. On March 16, General Motors stock fell 3.6% on a month-to-date basis. In February, the stock also fell 7.2%, erasing its January gains of 3.5%.

In 2017, GM traded on a positive note and ended the year with a rise of ~17.7% compared to the 19.4% rise in the S&P 500 Index. According to US auto sales data for 2017, GM continued to be the largest auto company (FXD) in the country ahead of its peers Toyota Motor (TM), Fiat Chrysler Automobiles (FCAU), and Ford Motor Company (F).

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Key technical levels

Last week, GM stock continued hovering above an important horizontal support level near $37.50, as we can see in the chart above. However, it violated this support level on March 19, which attracted renewed selling pressures and reflected underlying weakness in its price trend.

The stock’s price was already well below its 50-day simple moving average of $41.13. Now, the prior support of $37.50 would act as an immediate resistance level followed by a key resistance level near $40.80. The stock’s 14-day RSI (relative strength index) indicator was well below the line of equilibrium at 29.6, suggesting weakness in the stock’s underlying momentum.

Recent updates

On March 16, the NHTSA (National Highway Traffic Safety Administration) revealed that it was initiating an investigation to look into the failure of the airbag control units of Kia Motors America and Hyundai Motor America. The NHTSA’s report suggested that it would also find out whether other US automakers used the same or similar faulty airbag control units.

In February 2018, General Motors’ home market sales fell sharply by 6.9% YoY (year-over-year) to 221,000 units. In contrast, the company’s fleet sales rose 7% YoY last month due to a 15% jump in its commercial deliveries. At the same time, GM’s US market retail sales remained weak at 169,000 vehicle units in February, a fall of 10.5% YoY.

In the next article, we’ll see how Ford stock has traded in the last few weeks.

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