GM stock responding to Auto Shanghai 2011 awards

While Shanghai GM was named the Best Car Manufacturer and the new Chevrolet Malibu the Most Eye-Catching Car Model yesterday at the Auto Shanghai 2011 Grand Awards, GM stock has been awarded by investors with more buyers than sellers recently. The GM stock chart gives the technical picture.

GM stock is now trading above its 40-day moving average, but still below its IPO offering price of 33 and IPO opening of 35.

For the record, GM stock first closed below 30 on April 18th. Since then, the stock traded intra-day as low as 29.17, but has rallied to its present intra-day price just above 32.

The Auto Shanghai 2011 Effect

According to GM media resources, the awards were jointly organized by the auto show’s organizing committee and several mainstream media. About 5.2 million votes were cast during the 10-day exhibition.

Shanghai GM showcased a broad range of production and concept vehicles under the Chevrolet, Buick and Cadillac brands on its stand at Auto Shanghai 2011. The new Malibu, for example, was making its worldwide debut; and was one of more than 1,100 vehicles from global and local automakers on display at this year’s leading auto show in China.

The new Malibu is Chevrolet’s first global midsize sedan. It offers style, fuel efficiency, content and features, craftsmanship, and dynamic capabilities that rival high-end sedans. It will go on sale across China later this year. It will also be rolled out in nearly 100 other countries on six continents.

More GM Stock Technical Factors

Traders realize the fundamentals are reflected in the stock prices. Even the mere presumption that the fundamentals may go south can route a stock toward lower levels; likewise routing to new highs when the fundamentals are deemed bullish.

Aside from earnings reports, it is subjective. Charts, though, provide a quick view of where the buyers and sellers are changing their minds on who will be in charge.

Anyone who watches the charts auto sector stocks will see the similar chart patterns when all other factors are equal. Fact is, some problems are equal, like the falling US dollar and the tsunami effect in Japan on key auto part supplies. Other problems are specific to the auto stock.

One look at the GM stock chart will notice that new post-IPO low of 29.17. That is definite price support, because GM stock has risen since then; and that low will remain as support unless the market decides to choose a new level.

The upper bound is still the high of 39.94. In other words, we finally have a range by which GM stock can trade within.

Should we go away in May, as the old stock market adage states? The conundrum is, where will you place your money? Cash certainly isn’t paying much these days, but buying stocks requires buying wholesale not retail; meaning, the lower end of a range, not the upper unless proven technically to be a confirmed breakout. GM stock is far from that level.

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Disclosure: Frank Sherosky, creator of the chart and author of "Awaken Your Speculator Mind" does not hold any stock or option positions in this equity at this time.

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About the Author: After 39 years in the auto industry as a design engineer, Frank Sherosky now trades stocks and writes articles, books and ebooks via authorfrank.com, but may be contacted here by email: [email protected]

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Additional Reading:
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The 2013 Chevrolet Malibu unveiled at the NYIAS
GM stock officially trades below 30 level
Scuderi says 50-plus mpg achievable with turbocharged split-cycle air-hybrid engine
GM ranks above in clean-energy patents
EPA sets milestone for alternate fuel industry with regulation amendments
Buick LaCrosse with eAssist on par with highway fuel economy of compacts
Scuderi Air-Hybrid Engine technology setting up to challenge electric hybrids
Stop-start technology to advance more micro hybrids by 2016
Four alternate engine technologies for 2011 and beyond

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Comments

Important to note that GM’s largest national market is China, followed by the United States, Brazil, the United Kingdom, Germany, Canada and Italy.