Shares of General Motors (GM) - Get Report continue to stabilize near a key support area. The stock has been holding just above the $29 level for over a week now as selling pressure shows signs of easing. Following the steep selloff that GM suffered earlier this month, which pushed shares to a deeply oversold reading in the daily moving average convergence/divergence indicator, investors should be encouraged by the recent basing action.

At the November and December highs, GM ran into heavy resistance near $36.50. Back in April and June of last year the stock left behind two very damaging breakdown gaps in this area. The heavy resistance put in place as a result capped the powerful rally off the Aug. 24 spike low. In October, November and December, GM failed to move past this area, leaving behind an ominous topping pattern as last year drew to a close. As January began, the stock had lost all of its bullish momentum and was on the verge of a breakdown.

Over the first five sessions of January, which stretched the stock's losing streak to 10 straight days, GM fell over 13%. The stock managed a slight bounce after this flush ran out of steam before a fresh selling wave drove the stock to new lows. GM reached an important support zone during this phase and began to settle in last week.

With shares now in deeply oversold territory,  this area should be a focal point for GM bulls. The support zone includes GM's multi-week September lows as well as last week's low of $38.32. In the near term, investors should consider the $29-to-$28.30 area as a low-risk buy zone. A close below the $28 level would indicate a more prolonged basing process is ahead.

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Of note, GM is scheduled to report its fourth quarter results on Feb. 3.

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Disclosure: This article is commentary by an independent contributor. At the time of publication, the author was long GM.