
General Motors Is Headed Higher -- Here's How to Trade It Now
Shares of General Motors (GM) - Get Report are setting up well for more upside. With today's 1.75% jump, the stock is now up over 10% from last week's low and has left behind layers of support in the process. This impressive move, which includes five straight gains, should be very encouraging for GM bulls.
Back on April 21, GM left behind an ominous spike high after reporting solid first-quarter results. Less than two weeks later, the stock was in full pullback mode after falling back below its 200-day moving average. GM spent nearly all of May in a narrow range as overhead pressure continued to build. As June began, a new down leg was underway, and when the Brexit selling wave hit, the stock was in a very vulnerable spot. It appeared a retest of major support near the February 2016 low was on the way.
GM regained its footing just above the February low as the Brexit wave ran its course. The rebound off this low was rather choppy early on but has been very steady since last Wednesday's low. As this week began, the stock has left behind layers of support and should be considered a buy on weakness. GM has a solid layer of support between $30 and $29. A drift down to this zone would provide a low-risk entry opportunity.
On the upside, GM appears headed for a retest of very heavy resistance near the $31.75 area. The stock's late May high is here as well as a flat-lining 200-day moving average. A period of back-and-fill trade may be needed before GM has the power to clear this long-term indicator.
Of note, GM is scheduled to report its second-quarter results on July 21 before the open.
Click here to see the below chart in a new window.
Disclosure: This article is commentary by an independent contributor. At the time of publication, the author was long GM.










