Hello, everyone! This week, our spotlight is on General Motors $General Motors(GM.US)$ as we delve into the latest trends and examine the company's recent market activity.
What’s new?
On April 23, 2024, General Motors (GM) stock price surged 4.37%, the biggest one-day rise in almost three months. This could be attributed to its strong first-quarter earnings, an upgraded profit forecast for the year, and reduced electric vehicle battery cost.
GM’s top-line revenue of $43.0 billion for the quarter surpassed analysts’ expectations of $42.09 billion, a 7% jump from the same period last year. The company also reported adjusted EPS of $2.62, higher than the forecasted $2.12.
As a result of its strong performance, GM lifted its 2024 guidance and now expects full-year adjusted EPS of $9.00-$10.00, up from an outlook of $8.50-$9.50 previously.
CEO Mary Barra was optimism about the company’s initial sales momentum for EVs, such as the Cadillac Lyriq, crediting improvements in scale, material costs, and product mix.
Wedbush analyst Dan Ives reiterated GM’s outperform rating, stating that the first quarter marked a significant “prove me” period for the company, indicating that the long-awaited turnaround is underway.
Chart of the day
Trend analysis:
1. In October 2023, GM’s stock price fell to a three-year low, dropping below $30 due to the historic United Auto Workers (UAW) strike and the threat of costly airbag recall.
2. From mid-November onward, the stock has been on an upward trend, up over 70% within five months. This is due to several investor-focused initiatives, including a 33% increase in quarterly dividend and an accelerated $10 billion share repurchase program aimed at regaining Wall Street’s confidence.
3. However, on April 23 and 24, the stock failed to close above its prior high, signaling market hesitation in the short term.
Technical indicators:
GM has remained above the 50-day moving average (MA50) for five months, indicating a clear mid-term bullish signal.
The moving average convergence/divergence (MACD) is poised for a bullish crossover, but it’s important to also be aware of the potential for a bearish divergence.
Hidden divergence signals are evident as the price forms higher lows, while momentum-based oscillators such as the KDJ form lower lows, suggesting the continuation of the current uptrend.
Next move?
GM may face potential short-term resistance at the $46 psychological price level, where it has failed to close above multiple times.
Alternatively, the MA50 could serve as potential support in the short term.
This presentation discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve.
All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
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