U.S. equities are once again trading mixed on Wednesday, with the major averages hugging the unchanged line amid quiet trading.
There is a lack of trading catalysts here as investors await Friday’s big jobs report for clues as to the odds of a possible Federal Reserve interest rate hike later this month. The OPEC oil cartel is also holding a meeting on Thursday.
But there is action if you know where to look.
Auto stocks are getting slammed hard, capping months of stalling, on some disappointing sales numbers. That in turn is creating some pretty bearish opportunities for traders and quicker investors who would like to play on the short side.
Here are three auto stocks that got pummeled on Wednesday and could be in for even more pain.
Ford Motor Company (NYSE:F)
Ford Motor Company (NYSE:F) shares have dropped back below their 200-day moving average after reporting a 5.9% year-over-year drop in sales to 235,997 units. Demand for its F-series trucks remains strong, up 9%.
Car sales are struggling as lower energy prices has once against encouraged consumers to move up into gas-guzzling 4x4s and SUVs. A near 80% rebound in wholesale gasoline prices, as well as evidence of rapidly declining credit quality in new auto loans, should put a damper on that going forward.
The company will next report results on July 28 before the bell. Analysts are looking for earnings of 61 cents per share on revenues of $36 billion.
Edge Pro subscribers are holding a position in the June F $13 puts and are carrying a 10.5% gain so far.
General Motors Company (NYSE:GM)
General Motors Company (NYSE:GM) shares are on the slide, dropping below their 50- and 200-day moving averages in a possible end to a three-month consolidation range that would, in turn, end the post-February rebound. Shares have been sliding sideways since peaking in late 2013.
The company reported a 18% year-over-year sales decline for May, to 240,450 units vs. 254,600 units expected. It also estimates May industry-wide seasonally adjusted annualized sales of 17 million. While management pinned the blame largely on a drop in rental demand, there was a 13% drop in sales to “retail” customers.
The company will next release results on July 21 before the bell. Analysts are looking for earnings of $1.50 per share on revenues of $37.1 billion.
Fiat Chrysler Automobiles NV (NYSE:FCAU)
Fiat Chrysler Automobiles NV (NYSE:FCAU) shares have been under pressure, trading below their 200-day average since October and below their 50-day average since early May, on worries that sales look set to slow and fresh headlines that German authorities are investigating Volkswagen-like emissions cheating.
The company will next report results on July 27 before the bell. Analysts are looking for earnings of 42 cents per share on revenues of $29 billion.
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.
