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A Look at GM’s Technical Levels after Q3 Earnings Event

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GM’s key technical levels

As of November 1, General Motors (GM) stock was trading at $36.47. Since posting its all-time high near $46.76 in October 2017, the stock has lost about 22.0%. Immediate support lies near the $32.30 price level, followed by a key support near the swing low of $30.50. Only an early violation of the immediate support of $32.30 could extend short-to-medium-term weakness in the stock.

On the upside, GM’s stock could face an immediate horizontal resistance near the $37.80 level followed by a key resistance near $41.00. Now, let’s take a look at some key technical indicators. Investors typically use resistance and support levels to refine their entry and exit from a stock.

Technical indicators

The RSI (relative strength index) 14-day setup has moved up sharply in the last couple of sessions, and it was hovering at 66.7 as of November 1. An RSI indicator above the line of equilibrium (50 mark) reflects underlying strength in the momentum. The 50-day SMA (simple moving average) was at 34.06, lower than GM’s stock price, confirming minor strength in the short-term price trend.

Upward stock price movement may see resistance around the resistance levels, and downward price movements may hit a roadblock around support levels. A breach of support or resistance, however, could trigger sharp price action.

Auto industry’s Q3 2018 earnings

Other automakers (FXD) including Tesla (TSLA), Fiat Chrysler (FCAU), and Ford Motor Company (F) have already released their third-quarter earnings in the last couple of weeks. Tesla surprised everyone by reporting profitability in the third quarter on October 24.

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