GM, Giant Probabiltiy To Continue, Possible Hedge On Short-Side!

2020年7月3日

Hello, Traders Investors And Community, welcome to this stock-analysis where we are looking at the single stock GM (GENERAL MOTORS) and the recent price events, the current formation, and what we can expect the next times from this stock. Currently, the overall main stock market measured by the major indices like the S&P or RUSSELL is in an important decision zone in the middle-to-long-term perspectives where it has more or less recovered from its downside with a currently weakening uptrend at the moment, it will be a huge decision if the main market can hold its established bullishness or show more bearish pressure as the crisis seems to slow down but has not come to an end yet. Taking these overriding factors into consideration the market is presenting us stocks which were heavily damaged by the corona-crisis and stocks which held their pace and besides that making good gains in the short version stocks which are stronger than the main market, stocks which are neutral to the main market and stocks which are weaker than the main market.

Therefore we can divide these stocks and take advantage by hedging with shorts the stocks that are weaker than the market and long the stocks which are strong when the main market should provide further bullishness in the schedule. A good example of stock on the short side is GM (GENERAL MOTORS) which is sending clear bearish signals at the moment with its trading clearly above the all-time-high and confirmation below the preliminary important 60-EMA you can see marked in my chart which brought the first sell signal. Furthermore, GM is building up a huge bear-flag here with a very weak uptrend within this channel. The bear-flag scenario is supported by the fact that the stock is below the over five-year-old mirror level you can see in my chart marked at the 27.8 which is strong resistance and is corresponding with the 20-EMA that is marked in green overall building a bearish confluence cluster here which will highly likely confirm. This formation can be traded on the short-side with entry after a clear break of the lower boundary from the stocks bear flag. As the aggressive immediate entry approach is also possible here traders should decide on individual risk preference.

Looking at the car-industry at all we can take note that stocks like TSLA just jumping to the roof which can indicate a confirmation of the theory that electric car producing pushes more and more to the upside while classical fuel loses more in relevance which is also showing up in the stock market, what do you think about this theory? Is classical car producing an everlasting hero or will the new electric car technology take over? Please let me know in the comments. In this case, we see also the big differences between the stocks and their further outcomes while some looking really bearish there are others which just jumping to the roof also in a similar sector. This is a big development of the crisis which is completely fitting into the financial breakdowns we saw in stock history where there was a sorting out of companies and their stocks a similar mechanism is happening now, therefore it is important to take a well established and thought out approach in the markets to profit out of the volatility coming in and to diversify by hedging in both direction than only think in one direction and just cross fingers that everything moves according to one's perceptions.

In this manner, thank you for watching, support for more market insight, have a great day and all the best to you!
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Information provided is only educational and should not be used to take action in the markets.