GM closes lower for the 3rd day in a row
General Motors Company (GM) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, GM ended the month -1.62% lower at 24.89 after losing $0.31 (-1.23%) today, significantly underperforming the S&P 500 (0.77%). Closing below Thursday's low at 25.02, General Motors confirmed its breakout through the prior session low after trading up to $0.58 below it intraday.
Daily Candlestick Chart (GM as at Jul 31, 2020):
Friday's trading range has been $0.76 (3.03%), that's slightly below the last trading month's daily average range of $0.88. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GM.
One bullish candlestick pattern matches today's price action, the Bullish Hikkake Pattern.
After trading down to 24.44 earlier during the day, the stock bounced off the key technical support level at 24.57 (S1). The failure to close below the support might increase that levels significance as support going forward. When prices bounced off a significant support level the last time on July 20th, GM gained 0.54% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
As prices are trading close to July's low at 23.33, downside momentum could speed up should the share mark new lows for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for General Motors. Out of 160 times, GM closed higher 54.38% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after eight trading days, showing a win rate of 51.25% with an average market move of 0.50%.