Play Post It Draw It

The long side of the automaker looks vulnerable as it reports second-quarter results.

By BRUCE KAMICH

Aug 04, 2021 | 08:10 AM EDT

Stocks quotes in this article: GM

General Motors (GM) released its second-quarter results here on Wednesday morning and they beat on revenue expectations. Still, traders seem disappointed in the automaker's guidance and that has prompted a quick look at the charts.

In this daily bar chart of GM, below, we can see that prices have weakened since early June. Prices are trading above the rising 200-day moving average line but have been failing at the underside of the flat 50-day moving average line. Trading volume has weakened in the past two months and the On-Balance-Volume (OBV) line made a new low for the long move down from February. The weak OBV line tells us that sellers of GM have been more aggressive, with heavier trading volume transacted on days when GM has closed lower. The Moving Average Convergence Divergence (MACD) oscillator is bearish.

In this daily Point and Figure chart of GM, below, we can see an upside price target. A trade at $54.16 will weaken the chart.

Bottom line strategy: The long side of GM looks vulnerable. Take appropriate defensive action.

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