GM Stock Analysis: Watch Critical Support and Resistance Levels Amid Auto Tariff Concerns
Explore key technical levels for General Motors stock as it reacts to new auto import tariffs, highlighting crucial support and resistance zones for investors.
Essential Insights
- General Motors (GM) shares are under pressure following the announcement of new auto tariffs, leading the S&P 500's decline.
- A bearish engulfing candlestick pattern has formed after a brief rally, signaling potential further downside.
- Investors should closely watch support around $45 and $40, as well as resistance near $50 and $55 for possible recovery attempts.
General Motors is facing significant market headwinds after the Trump administration announced a 25% tariff on imported vehicles and auto parts. This policy change has particularly impacted GM due to its substantial imports from Mexico and South Korea.
On Thursday, GM shares dropped over 7%, closing near $47.20 and marking a decline of more than 20% from its 52-week high recorded in late November. This decline also dragged down the broader S&P 500 index.
Technical analysis reveals a bearish engulfing pattern on GM’s price chart, following a short-lived upward movement. Additionally, the 50-day moving average has crossed below the 200-day moving average, creating a 'death cross'—a technical signal often associated with further price declines.
Key Support Levels to Watch
Initial support is expected near the $45 level, which aligns with historical peaks and troughs dating back to mid-2023. A break below this could lead to further losses toward $40, an area that has previously acted as a strong support zone in early August 2023 and throughout early 2024.
Critical Resistance Zones
On any rebound, GM shares may encounter resistance around the psychological $50 mark, which corresponds to multiple peaks and troughs from mid to late 2023 and early 2024. Surpassing this level could open the door for a rally toward $55, where sellers might reemerge near the previous head and shoulders formation.
Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. The author holds no positions in GM securities at the time of writing.
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