Happy days are here again.
The market, despite rocketing upwards yesterday, continues to rise. It didn’t make a huge leap during today’s session, but the indexes managed to stay well outside of their normal trading range – an accomplishment unto itself.
Many analysts saw equities dropping today, but instead, they logged another new all-time high.
Will the bull market ever end?
And while the going is good, we might as well get going with long setups on oversold stocks. Two weeks ago, we featured Fiat Chrysler (NYSE: FCAU), which is now a profitable trade. Last week, we also examined a trade for Ford (NYSE: F), which erupted the day after we recommended going long.
Today, we’ve got another carmaker – General Motors (NYSE: GM). And much like Ford, GM looks like it’s about to soar after enduring a major sell-off in November.
In the daily candlestick chart above, you can see that GM is butting up against key resistance. With our F trade last week, the same sort of thing happened, and we set a trade trigger right above resistance.
The next day, F leaped past our entry point for a profitable trade. With GM, the same exact thing appears as though it’s about to happen. A higher low was set in mid-November after GM hit the lower Bollinger Band (BB), and since then it has actually set a minor higher low, precisely 5 sessions ago.
It’s only slightly higher than the low in November, but it still counts. And in this case, with GM at resistance, it’s evidence enough that a true breakout could be coming – one that kick-starts a trend reversal.
The 50-day moving average is pointing up, too, and the current daily candlestick is trading above the last 18 candle bodies. Best of all, the stochastic indicator is still below 80, suggesting that GM isn’t overbought quite yet. In fact, this stock was in a similar predicament earlier in the year and ended up rising mightily in the weeks that followed.
That being said, it might make sense to go long on GM with a trade trigger of $36.57, slightly above the current day’s high.
If GM ends up crossing that threshold, a huge gain could be waiting on the other side. The “phase one” trade deal may have initially given GM some new life, but now that bulls have ahold of it, this stock might be ready to hit the open road.