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GM Stock Is Driving Even Higher

GM is firing on all cylinder after a strong earnings report

   

beatthebell 185x185 GM Stock Is Driving Even HigherCarmaker General Motors (GM) reported better-than-expected results for its third quarter before the open on Wednesday. Looking at the company’s different segments, revenue grew everywhere except in its international operations.  The company’s cash flow also increased year over year from $3.10 billion to $3.30 billion.

The overall solid report was rewarded with GM stock being bid higher to the tune of 3.24% as it gapped up at the open and never looked back.

Ever since GM pulled off the biggest initial public offering in U.S. history in November 2010 (after being rescued by the government a few years earlier), the stock has seen a fairly wild swing.  The initial post-IPO rally abruptly ended in early 2011, after which GM stock began a choppy slide into the summer of 2012, when the broader U.S. stock market also developed a good support point.  From there GM stock has been on a tear, rallying roughly 90% into July of this year.

GM stock has oscillated back and forth in a constructive consolidation area since July, the upper end of which has again been reached with Wednesday’s post-earnings rally. A natural attraction area for GM stock on the upside is around the January 2011 highs of $39.45, or close to 6% higher from Wednesday’s close.

gm multi year GM Stock Is Driving Even Higher
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On the daily chart, Wednesday’s gap-and-go rally cleanly hurdled GM stock past a multi-week resistance line near $36.25 on massive volume of 42 million shares traded.  This breakaway gap has likely injected enough near-term momentum back into the stock for a rally to fresh year-to-date highs, which would be accomplished on a daily close above $37.90.

From there, as discussed on the above longer-term chart of GM, the stock has a good chance of retesting its January 2011 highs around $39.45.  Beyond that (and absent any major negative outside forces), such an upside move could well bring the stock to all-time (since the 2010 IPO) highs.  For now, however, my focus is on a retest of the 2011 highs.

gm daily GM Stock Is Driving Even Higher
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Learn more about the strategies Serge Berger uses to create profits in the market every day. Download his trading plan in the “Essence of Swing Trading” eBook by clicking here. At the time of publication, Berger had no positions in the securities mentioned.


Article printed from InvestorPlace Media, http://investorplace.com/2013/10/gm-stock-general-motors/.

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