The market has been in a punishing mode lately, but even still, one thing is for certain: Stocks with good business models and steady earnings will survive the current pullback, while businesses struggling for growth, litigation issues or negative sentiment could see further declines in their stock prices, for instance, General Motors (GM).

I suggested going short General Motors  in late September by using the GM December 32 puts (GM141222P00032000). These puts doubled this week after shares fell 6% and tested a fresh 52-week low of $31.65. They were up another 25% Wednesday and have traded up to $2.32.

The puts were profiled at 95 cents. Vigilant traders who followed my perimeters were stopped out of the trade at the beginning of October for a 26% profit after shares made an attempt to recover the 50-day moving average. While this level was recovered last week, the General Motors chart work I showed was ultimately pointing toward a drop below $30, possibly $28.

I have kept General Motors on my Watch List and, while I don’t like to “chase” a new positions in stocks before doing additional homework, the GM November 29 puts (GM141122P00029000), which traded Wednesday around 40 to 50 cents, might be a good fit for a “piggy-back” trade on additional selling pressure.

However, I would wait for General Motors shares to fall below $30.50 before starting new positions. Shares tested a low of $30.79 Wednesday, so any market weakness could send the shares speeding south.

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