General Motors Consolidates as 50-day SMA Bears Down
The last eight weeks of gains in the market have provided significant consolidation time. Many stocks that fell sharply in February and March have gone sideways and may now be at risk of continuation to the downside.
General Motors could be a major example of that trend. The automaker lost half its value when the S&P 500 crashed and has done little to recover since.
It’s drifted as other groups, like biotechnology and software, have advanced. That lack of relative strength is one potential red flag.
Another is its tightening range between $20 and $24. GM’s highs were lower during that time, creating the potential for a bearish descending triangle.
Finally, you have the 50-day simple moving average (SMA) bearing down. Will the bears find themselves in the driver's seat if GM closes below it today?
The last earnings report had some glimmers of hope as CEO Mary Barra preserved cash. But ultimately, cars are economically sensitive and discretionary items. Given the current trends in employment and now deflation, GM also faces this challenging macro backdrop.
General Motors could be a major example of that trend. The automaker lost half its value when the S&P 500 crashed and has done little to recover since.
It’s drifted as other groups, like biotechnology and software, have advanced. That lack of relative strength is one potential red flag.
Another is its tightening range between $20 and $24. GM’s highs were lower during that time, creating the potential for a bearish descending triangle.
Finally, you have the 50-day simple moving average (SMA) bearing down. Will the bears find themselves in the driver's seat if GM closes below it today?
The last earnings report had some glimmers of hope as CEO Mary Barra preserved cash. But ultimately, cars are economically sensitive and discretionary items. Given the current trends in employment and now deflation, GM also faces this challenging macro backdrop.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.