Can GM Sustain Its Gains After a Strong Q1?
Let's check the charts to find out.
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Shares of automaker General Motors GM were trading higher Tuesday in response to "impressive" Q1 results and higher FY24 profit guidance.
Let's check out the charts and indicators of GM to see if these early gains can be sustained.
In this daily bar chart of GM, below, I can see that prices gapped higher and continued to advance Tuesday morning. A close above $46 will refresh the uptrend. Prices trade above the rising 50-day moving average line and above the rising 200-day moving average line. The trading volume has been more active since late November.
The math driven On-Balance-Volume (OBV) line has gently risen since late November and tells me that buyers of GM have been more aggressive than sellers. The Moving Average Convergence Divergence (MACD) oscillator has been moving sideways above the zero line since early December.
In this weekly Japanese candlestick chart of GM, below, I see a mixed picture for the automaker. Prices trade above the rising 40-week moving average line. The weekly volume histogram shows me that volume has been declining since November and that is not a bullish pattern in my book.
The weekly OBV line shows a rise from November followed by weakness from the middle of March. The MACD oscillator is in a bullish alignment above the zero line but the two moving average lines that comprise this indicator were narrowing before today's strength. A large white candle (bullish) with a close above $45 would go a long way to restoring the uptrend.
In this daily Point and Figure chart of GM, below, I can see an upside price target in the $84 area. A trade at $47 is needed to refresh the uptrend.
In this weekly Point and Figure chart of GM, below, I can see the same price target as the daily chart above: $84.
Bottom line strategy: Will GM make a close above $47 to refresh the uptrend on the Point and Figure chart? The share price of GM is already off the best level of the day so I have my doubts that GM will be able to generate an upside breakout.
Perhaps we will have more sideways price action before renewed price strength. Buyers may need to be patient. Risk to $40
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