Week 24: GM Stock Hovers below $45.10 Resistance



GM stock

Last week, General Motors (GM) stock fell ~0.8%, settling at $43.91 and ending five consecutive weeks of upward movement. In the previous week, the stock rose 2.4%. As of June 15, General Motors stock had risen ~20.8% quarter-to-date and 7.1% year-to-date. In comparison, the S&P 500 had risen 4.0% this year.

Key technical levels

As noted in our previous technical update series, GM stock reached a key resistance level of $45.10 in early June. The stock tested this resistance level again on June 15 but couldn’t break past it. A violation of $45.10 could attract fresh buying and take GM stock toward its next resistance of $46.76, its all-time high.

On the downside, immediate support lies at $42.90. GM stock was trading well above its 50-day simple moving average of $39.17, suggesting optimism. Its 14-day RSI (relative strength index) score was easing away from overbought territory, at 66.8, reflecting a mixed bias in the stock’s momentum.

In 2017, GM continued to be the top auto company (FXD) based on US auto sales volumes, ahead of Toyota (TM), Fiat Chrysler (FCAU), and Ford (F).

Key drivers

According to a Bloomberg report, General Motors “is having early discussions internally and with banks about strategic options” for its AV (autonomous vehicle) unit, GM Cruise. According to the report, the company “is researching possibilities including a public offering of shares, listing a separate tracking stock to reflect its value, or spinning off the unit.” However, the report added that GM “may not take any action for a couple of years, if at all.”

On May 31, GM revealed that Japanese investment company SoftBank is willing to invest $2.3 billion in GM Cruise. The company’s improving position in the AV segment could be one key reason for its price rally earlier in June. Continue to the next part, where we’ll look at Ford’s key technical levels.

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