Looking at the General Motors stock (NYSE: GM) on the daily chart, we can see that, overall, it continues to trade below its long-term downside resistance line drawn from the peak of October 2017. But from a more medium-term perspective, after bottoming near the 30.50-dollar mark in October last year, the share price started climbing up again. Once again, GM got held near the 40.44 barrier, which it struggles to surpass. After hitting that level last week, the stock reversed 180-degrees and made a push lower. That said, the downside might be limited due to the medium-term upside support line taken from the low of December 26th. For now, even though we are still positive over the stock’s near-term outlook, from the shorter-term perspective, the price could correct a bit lower.
As mentioned before, after testing the 40.44 barrier, GM reversed back down and is now aiming for the 39.39 obstacle, a break of which could lead the share price towards the 38.70 zone, marked by the low of April 9th. Slightly lower runs the aforementioned medium-term upside support line, which could also help in stopping the fall. If the stock struggles to move below that upside line, investors might see this as a good opportunity to jump in again and buy GM. If the buying activity is strong and the share price travels all the way back to the 40.44 barrier, a break of it could excite even more potential buyers. Such a move could open the path to the 40.70 obstacle, or even the 41.31 level, marked by the highs of June 26th and 27th, 2018.
Judging by our oscillators, currently both are in support of the above-discussed idea, namely a small correction lower before another leg of buying. Both the RSI and the MACD are showing some signs of slowing upside momentum. The RSI, after pushing above 50, had suddenly dropped and is now pointing lower. Nevertheless, the indicator still remains above 50. The MACD, on the other hand, is still above zero and its trigger line, and is currently running flat.
Alternatively, if the stock breaks below the previously-mentioned upside line and the price falls below the 38.00 mark, which is the high of April 2nd, this might keep investors away from GM for a while. Such a move could increase the stock’s chances to fall even further towards the 37.23 obstacle, a break of which could open the door to the 36.30 level, marked by the lows of January 11th and March 22nd.
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