U.S. equities finished lower on Monday in quiet trading.
Investors remain focused on the pace and timing of possible interest rate hikes from the Federal Reserve later this year. Additional information will be gleaned from the release of the latest meeting minutes on Wednesday.
But with stocks contending with major overhead technical resistance levels, and buyers losing enthusiasm based on warning measures of market breadth, it’s likely that the seven-week-plus uptrend could suffer a setback in the days and weeks to come — especially with the Q1 earnings report season set to start.
With that in mind, here are three stocks vulnerable to a pullback:
Ford Motor Company (F)
After battling with its 200-day moving average since early March, Ford Motor Company (NYSE:F) shares are pulling back and are set to drop out of a two-month consolidation range.
If support at F’s 50-day moving average doesn’t hold, watch for a drop all the way back to its February low near $11 — a 14% move from here.
Citigroup Inc (C)
Shares of Citigroup Inc (NYSE:C), like many other big bank stocks, have stalled over the past two months and look vulnerable to a drop back below its 50-day moving average as a rally in long-term Treasury bonds — ostensibly on an increase in risk aversion — pulls down long-term yields, and thus, the net interest margin that sets bank profitability.
General Motors Company (GM)
General Motors Company (NYSE:GM) shares have dropped to test their 50-day moving average from above for the first time since January as investors begin to wonder whether the ultra-hot pace of auto sales can really last amid evidence of overzealous lending to sub-prime borrowers and a flood of vehicles about to come off leases and depress used vehicle prices.
In anticipation, I have recommended the April $30 GM puts to my Edge Pro subscribers.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
