The automaker has been decimated over the past few months, along with Ford (F) - Get Report and Fiat Chrysler (FCAU) - Get Report. The Big Three are under monumental pressure as the coronavirus-induced economic halt puts their financials to the test.
For GM, the company reported non-GAAP earnings of 62 cents a share, beating estimates by 28 cents. Even GAAP earnings were positive at 17 cents ashare and almost double consensus estimates.
Revenue of $32.7 billion contracted just 6.1% year over year and beat analysts' expectations by more than $1.3 billion.
On the surface, it's a pretty solid quarter. Management expressing confidence sure helps too. That's even as the company suspended its dividend and buyback plan last month.
The question now becomes: Can the charts make up some of the current damage?
Trading General Motors
With Wednesday’s action, shares of General Motors have climbed up to the 38.2% retracement and 50-day moving average.
Both of these marks come into play below big resistance, which is between $24 and $24.75. As for support, two levels stand out to me. That’s the $21 mark and the 23.6% retracement near $19.60.
With the broader market climbing all the way up to the 61.8% retracement, it’s clear that GM stock has badly lagged in this rally relative to its decline.
A top- and bottom-line beat and an optimistic management team should go a long way towards aiding the rebound. However, GM likely needs the broader market to hold up to some degree too, given how weak it’s been.
On the upside, I really need to see GM stock reclaim $23 and close above this mark. That will put it back above the 38.2% retracement and the declining 50-day moving average.
That’s the first step to getting a push up to resistance. If General Motors can get above $24.70, then the 50% retracement near $26 is in play, with a potential gap fill up to $28.50 on the table after that.
Remember though, it all starts with $23. If GM can’t get above that mark, it puts more downside in play.
A move below the 20-day moving average near $22 puts $21 support and this week’s low at $20.12 in play.
GM isn’t out of the woods yet, but it’s got a chance. Let’s keep an eye on this one this week.