GM breaks below key technical support level
General Motors Company (GM) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, GM finished the week 3.36% higher at 34.76 after losing $0.53 (-1.5%) today, strongly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Closing below Thursday's low at 35.16, General Motors confirmed its breakout through the previous session low after trading up to $0.74 below it intraday.
Daily Candlestick Chart (GM as at Feb 14, 2020):
Friday's trading range has been $0.97 (2.75%), that's far above the last trading month's daily average range of $0.69. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GM.
Despite a strong opening the stock closed below the prior day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on February 6th, GM lost -2.04% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Black Candle.
Prices broke below the key technical support level at 34.89 (now R1), which is likely to act as resistance going forward.
Though the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Its common bearish interpretation has been confirmed for General Motors. Out of 283 times, GM closed lower 52.30% of the time on the next trading day after the market condition occurred.