Last week, General Motors (GM) stock fell ~6.1% to $41.25, marking its second consecutive week of decline after five straight weeks of gains. In the previous week, the stock fell 0.8%. As of June 22, General Motors stock had risen 13.5% quarter-to-date and 0.6% year-to-date. The S&P 500 has risen 3.0% this year.
General Motors stock turned negative last week after a failed attempt to violate a key resistance level near $45.10, which should continue to act as key resistance this week. A violation of this resistance could attract fresh buying.
On the downside, immediate support lies at $39.20. The stock’s 14-day RSI (relative strength index) score has fallen below its line of equilibrium to 48.1, reflecting weakening momentum. According to 2017 US auto sales volumes, GM was the top company (FXD) in the country, ahead of Toyota (TM), Fiat Chrysler (FCAU), and Ford (F).
Earlier this month, Bloomberg reported that 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.” 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 space could be a key reason for its price rally earlier in June, while US-China trade tension may have prompted the stock to turn negative. Continue to the next part, where we’ll look at Fiat Chrysler stock’s technicals for the week ahead.