News that the Uncle Sam was exiting is position in General Motors (GM) provided a big 6.6% move in the stock yesterday, pushing shares through a resistance level at $26, and triggering a bullish setup in shares. This is one perfect example of the technicals leading the fundamentals in the real world. And it's an example of a stock that could have further to run before the calendar flips over to 2013...
That's because GM had been forming an ascending triangle pattern, a setup that's formed by horizontal resistance above shares and uptrending support below them. Essentially, as GM bounced in between those two technical price levels, it was getting squeezed closer and closer to a breakout above that $26 resistance level. Yesterday's news gave traders that breakout.
Obviously, GM is a good distance above that resistance line thanks to the gap we saw yesterday, ramping up the risk a little today. And sure enough, we're seeing a bit of a throwback early in this morning's session. That's not necessarily a bad thing -- $26 is the nearest support level for shares, so if you're looking for an ideal place to buy GM here, I'd recommend waiting for the next bounce higher.
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