General Motors (GM) - Get General Motors Company (GM) Report was extremely close to a major breakdown yesterday. After stabilizing near the September low the stock quickly rebounded and by the close was back above its 200-day moving average. Today GM is extending Wednesday's upside reversal with a 5% ramp and is now setting up well for more gains.

A week and a half after the Brexit low GM began a powerful bull trend. The stock strung together a 13-day winning streak that lifted it over 20%. This impressive move clearly reached exhaustion just as the $33 level came into play. GM entered a consolidation pattern as July came to a close while straddling the 200-day moving average.

The stock has mounted numerous attempts at an upside breakout since then but has repeatedly failed. Yesterday's extremely high volume reversal, which held the lower band of the 14-week consolidation, appears to have marked a significant low. The result could be a fresh bull run that will reward patient GM investors.

In the near term GM bulls should consider the stock a low-risk buy between $32.20 and $31.50. This key zone includes last week's high, as well as the 50-day moving average. The stock still has challenges ahead, mainly the October peak near $33, but the new momentum is impressive. Once past last month's high GM, which has a long way to travel before entering overbought territory, will be well on its way to new 2016 highs.

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