Stocks to Sell: General Motors (GM)
You can add deteriorating technicals to the list of woes besetting General Motors (GM). The GM stock selloff initiated by the automaker’s recall of 13 million cars worldwide caused shares to break through key levels on the way down.
GM stock is a good 19% below its own 52-week high and 7% below its 200-day moving average. GM stock is only 1% below its 50-day moving average, but technical weakness suggests that will widen soon.
Neither can investors in GM stock hope for buying on oversold conditions. The relative strength indicator is practically a wash at 47.
Worst of all is that June is never kind to GM stock. Late spring and early summer might be a good time for a test drive, but it sure isn’t good for shares. Based on a long track record, GM stock has an implied loss of 6.7% in June. It historically tends to fall — albeit fractionally — in July.
GM stock could become a buy once it sorts out its recall headaches and shares find technical support. Until then, count it among the stocks to sell.