GM looks better and better, here’s why
General Motors
(
GM |
Quote |
Chart |
News |
PowerRating)
must be desperate, their 2007 Tahoe was released before I stopped
dating my checks with ’05, they’ve cut their dividend and they may be
considering a sale of their profitable GMAC unit. To top it off, GM’s ineptitude
at branding and inability to deliver on design are about force those not
responsible for the company’s struggles into the employment pool. A little
depressing, isn’t it?
Instead of seeing this as only bad thing, try looking at it from a purely stock
trading perspective: It’s about time GM got desperate! They’ve lost
market share and huge amounts of money, and they’re even dealing with bankruptcy
rumblings across Wall Street. These are not the qualities of a Dow Blue-Chip
company. Fortunately, there are signs of a turnaround–and like usual, the stock
may be leading the way:
The first thing I notice when looking at the chart is that the absolutely
painful downtrend that GM suffered has come to an end—at least for now. More
importantly though, the stock has started to put in a new uptrend channel
complete with high-volume price increases and low-volume dips. This is a bullish
sign for the stock from here.
Now comes the important part for GM from a trader’s perspective. Because it has
recently dipped in price to the bottom of the trend channel (on low
volume-bullish again), GM needs to reverse higher here to keep the recent
uptrend in place and confirm the longer term reversal.
DaytradeTeam will be watching GM over the next couple of days, keeping a close
eye on institutional volume trades and opening/closing bell activity. Once we
see a trading opportunity that meets our risk/reward criteria in either
direction, we will alert our members in real-time with the appropriate action to
take.
Hopefully GM’s stock is tipping us off to the pending turnaround in the
company’s culture and product quality: Management is losing the
“but…but…we’re GM” mentality, production plants are taking on an
entrepreneurial, profit-based mindset and the 2008 Tahoe (coming in May?) will
get 25 MPG. OK, I’ll settle for one out of three.
Get started on a trial membership to DaytradeTeam right now and see what
position we take on GM stock in our swing trading or options trading systems!
Andy Swan
Andy Swan created and
co-founded DaytradeTeam five years ago on a principle of empowering
individual stock and options traders with the techniques and analysis methods
typically reserved for elite professionals. His expertise in technical analysis
and commitment to educating members earned DaytradeTeam a top-ranking among
advisory services for several years.