Are General Motors (NYSE:GM) shares driving you crazy? You’re not alone. But that same disrespectful action is offering investors a solid value opportunity on and off the GM stock price chart. Let me explain. General Motors stock has not been an easy ride to riches for most long-term shareholders. In 2018 alone GM is off nearly 21%. The indignity compares to index-types moaning over the likes of the S&P 500 having corrected 10% from all-time-highs and turning flat on the year as of this past Thursday.
GM stock is also squarely sitting where it was five years ago. I suppose that sting is slightly lessened with the company’s dividend, which stands at a whopping 4.73%. Again though, the income pales in comparison to the price performance of the broader market over the same period.
Even worse, GM’s dog-like status comes despite the automaker’s very well-received EV Chevy Bolt by consumers, a key battery and self-driving car partnership with Honda Motors (NYSE:HMC). What’s more, General Motors is positioned nicely overseas and within the emerging autonomous vehicle market.
But that’s not all.
First, General Motors stock is dirt cheap compared to the broader market. Secondly, GM is also a diamond in the rough relative to peer Ford (NYSE:F) and EV upstart Tesla (NASDAQ:TSLA) — both of which delighted investors with better-than-expected results. So, what’s not to like, other than GM stock being priced by Wall Street as though another financial crisis is right around the corner, despite lessons learned by General Motors and its peers?
Honestly, I don’t see the car wreck others are apparently bracing for. Slowdown? Sure. But we’re not looking at another bailout, folks. Finally, as the GM stock price chart comes well-equipped with a solid-looking bottom-in-the-making that doesn’t require a rear view mirror to proceed, it’s time to back up the truck in GM stock.
GM Stock Weekly Chart
The weekly chart of GM stock shows a wildly out-of-favor name that’s putting the finishing touches on a bottoming candlestick pattern comprised of a doji decision bar followed by this week’s inside candlestick. A move thru $32.54 would confirm a bullish reversal in General Motors shares.
What makes this setup all the more enticing is the pattern is backed by trendline support dating back to 2012, the 62% retracement level and a Fibonacci-based two-step or mirror move wedged in-between 100% and 127%. The weekly stochastics also points to a supportive situation from which General Motors stock can move forcefully higher.
The GM Stock Trade
For like-minded value investors interested in buying GM stock the technical recommendation would be to wait for confirmation above $32.54 in conjunction with a 7% stop-loss. If needed, the exit below $30.26 is roughly 0.75% beneath the pattern low of the past two weeks. At the end of the day that should help prevent investors from becoming crash test dummies in the unlikely event we’re the ones being nearsighted.
Investment accounts under Christopher Tyler’s management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies and related musings, follow Chris on Twitter @Options_CAT and StockTwits.