General Motors (GM) Automobiles Flatline – April 3rd, 2020

S&P 500 Market Outlook: Neutral

Bearish Trade: GM $79.23 – Consumer Discretionary

The bearish DailyPlay for Friday, April 3rd General Motors (GM). As part of the Consumer Discretionary sector (XLY), GM has seen a steep decline in the midst of the current coronavirus pandemic with no signs of slowing down.

Fundamental View

  • Production delays are extended further as COVID-19 pandemic grows
  • 55% y.o.y. declines in revenue due to production shutdowns
  • Potentially little to zero revenue in Q2, extending into Q3
  • GM has withdrawn guidance for Q1 earnings
  • Reports earnings on May 6, 2020 (34 days)

Technical View

  • Rejection at $23 resistance level, suggest further weakness towards $15
  • Weak relative strength score (3 out of 10)
  • 1m and 6m bearish trend 
 
 

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