Last week, General Motors (GM) stock largely remained unchanged, and it ended the week with a minor 0.1% rise. In the previous week, the stock traded on a mixed note and fell 0.9%.
While GM stock gained 8.7% in October despite the 6.9% drop in the S&P 500 Index, it’s fallen 4.1% this month as of November 20. In the same period, the S&P 500 has seen a fall of 3.4%. Let’s take a look at GM’s key technical levels before we explore its recent fundamentals.
On November 20, GM stock settled at $35.09. An immediate support level in the stock lies near $33.90 followed by a key support at its 52-week low of $30.56.
In November so far, GM stock has been gradually moving downward, and it’s hovering below a descending trendline. This trendline near $35.50 should act as an immediate resistance level in GM stock followed by a key horizontal resistance level near $38.90.
The stock’s 14-day relative strength index indicator wasn’t far from the line of equilibrium at 51.5, reflecting a mixed bias in its momentum. The stock’s price is approaching its 50-day simple moving average of $34.14, suggesting weakening trend strength.
These technical indicators and GM’s recent price action make its stock chart no better than that of its direct peer Ford Motor Company (F), which we looked at in the previous article.
In 2017, GM continued to be the top auto company (XLY) based on US auto sales volumes. GM was followed by Ford, Toyota Motor (TM), and Fiat Chrysler Automobiles (FCAU) as the second-, third-, and fourth-largest automakers in the United States, respectively, by sales volumes.
The difference is in the fundamentals
General Motors’ third-quarter adjusted earnings surged ~41.7% YoY (year-over-year) to $1.87 per share. The company’s third-quarter global revenue rose 6.5% YoY, and its adjusted EBIT margin expanded to 8.8% from 7.5% in the third quarter of 2017. Hence, GM’s strong fundamentals could keep investors’ optimism alive in the medium term despite the near-term weakness suggested by its technical chart.
In contrast, Ford’s profitability continued to deteriorate in the third quarter due to lower sales volumes and higher commodity costs.
Read on to the next article, where we’ll discuss Fiat Chrysler stock’s technical outlook in the near term.