Here's another stock that's in make-or-break mode right now: General Motors (GM). 2012 has been a pretty unspectacular year for GM -- shares of the Detroit automaker have moved around 13% higher since January, falling a couple of hundred basis points shy of the S&P 500's performance over the same period. And now, with shares looking toppy right now, I'd recommend investors take a second look before hitting the "buy" button.
GM made a near-term high in September, pushing up through the $25 level only to get swatted back down to support at the 200-day moving average. That's a signal that there's a glut of supply of shares at $25. In other words, it's a price where sellers are more eager to sell and take gains than buyers are to buy.
While GM did manage to break its downtrend from the spring, this stock's uptrend is tenuous right now and it's testing support. A break below support means that GM is back in downtrend mode.Momentum adds some important food for thought for GM buyers - the uptrend in RSI broke back in September. Since RSI is a leading indicator of price, that's a red flag worth heeding in October. While support hasn't been broken yet, I'd recommend selling a break below the 200-day moving average.
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