A Technical Strategy for General Motors Ahead of Earnings

During Friday's Mad Money program Jim Cramer gave viewers his Game Plan for this week. On Wednesday we will get earnings from General Motors (GM) and Cramer expects to hear good things.

We looked at GM back on Dec. 23 and wrote that, "I don't know if GM is undervalued, but the charts suggest an upside target in the $56 area." 

Let's skip the showroom and review a few charts. 

In the daily bar chart of GM, below, we can see that prices have reached our $56 price target noted in December. Now what? Prices are still in an uptrend above the rising 50-day moving average line. The line was tested in late December and early January.

The 200-day moving average line has a positive slope and the On-Balance-Volume (OBV) line is rising which tells us that buyers of GM have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment. 

In the weekly bar chart of GM, below, we can see that the shares have broken out over the highs of 2019 and 2018. Prices are in an uptrend above the rising 40-week moving average line.

The trading volume has increased in the past month and the OBV line has risen to confirm the price gains. The MACD oscillator is in a bullish alignment above the zero line. 

In this daily Point and Figure chart of GM, below, we can see a potential upside price target in the $64 area. 

Bottom-line strategy: I have no special knowledge of what GM will report before the opening this Wednesday. Longs should raise stop protection to $51 and if there is a surge to near $64 I would suggest taking some profits.

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