How General Motors Can Race to $75

General Motors and Ford continue to hold up much better than Tesla and NIO. Can GM find enough momentum to get to $75 a share?
Author:
Publish date:

While Tesla  (TSLA) - Get Report, NIO  (NIO) - Get Report and others remain well off the highs, General Motors  (GM) - Get Report remains right there.

It took a little longer and the rally hasn’t been as robust as some of the electric vehicle makers. However, the move in GM stock has been pretty impressive.

The recent premium in both General Motors and Ford  (F) - Get Report is new. For the past decade, investors have constantly pinned these stocks at deep discounts vs. the overall market.

But with both embracing EV technology it’s clear Wall Street has been willing to revalue these holdings.

GM hit new all-time highs last week, but has quickly shed about 7% from those levels. For now, buyers are stepping in. How long will that remain the case?

Ford is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells F? Learn more now.

Trading General Motors

Daily chart of GM stock.

Daily chart of GM stock.

Look at the way General Motors stock has had these series of big moves to the upside and gradual pullbacks into support.

That support comes into play at the 10-week and 50-day moving averages. Each time recently, it has provided the next gust of energy to push the stock to new highs. The dip in late-February and early March was perhaps most telling.

While other EV and alternative fuel stocks were getting clobbered, GM stock continued to hammer up off of the 10-week moving average. In fact, it never even tested the 50-day moving average earlier this month. 

That’s how strong the stock was as buyers constantly stepped in to buy the dip.

For what it’s worth, Ford hasn’t tested its 50-day moving average since the first several days of 2021 and didn’t close below the 21-day moving average during the most recent selloff. That's incredibly strong.

For GM, the stock has had trouble pushing through $60, yet is being propped up by the 10-day moving average.

From here, let’s see which gives way first - the 10-day or $60. If it’s the latter, first see if GM can take out the 52-week high up at $62.24. If it can, I’m looking for $65, then $70 and ultimately, a push up to the 261.8% extension.

If the 10-day moving average breaks as support, let’s see if we can get a quick flush down to the $53.50 to $55 area. GM stock will find a plethora of support in this zone, including the 21-day, 50-day and 10-week moving averages, as well as VWAP support.

This would be a reasonable are to buy the dip. 

Below puts the $48 to $50 area in play, followed by the 100-day moving average.