GM stuck within tight trading range
General Motors Company (GM) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, GM finished the week 14.8% higher at 25.98 after edging higher $0.18 (0.7%) today, slightly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 25.98 marks the highest recorded closing price since March 11th. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (GM as at May 22, 2020):
Friday's trading range has been $1.01 (3.89%), that's slightly below the last trading month's daily average range of $1.14. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for GM. Prices continued to consolidate within a tight trading range between 25.21 and 26.23 where it has been caught now for the last three trading days.
Four candlestick patterns are matching today's price action, the Bearish Doji Star, the Hanging Man and the Northern Doji which are known as bearish patterns and one neutral pattern, the Doji.
The share found buyers again today around 25.22 for the third trading day in a row after having found demand at 25.21 in the prior session and at 25.22 two days ago. The last time this happened on March 31st, GM actually lost -7.31% on the following trading day.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 23.02.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling might accelerate should prices move below the close-by swing low at 25.21 where further sell stops could get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Doji" stand out. Though it is usually interpreted as neutral, it has actually shown to be bearish for General Motors. Out of 132 times, GM closed lower 56.82% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 53.79% with an average market move of -0.52%.