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Cars Have A Reverse Gear Too

ByDragonfly Capital
AuthorGregory W. Harmon
Published 01/18/2013, 02:12 AM
Updated 05/14/2017, 06:45 AM
GM
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F
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GASI
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SMA
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RSI
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SMA
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General Motors (GM), started higher in July and in mid December shifted into a higher gear taking it to January 15th. As it made that top, the Relative Strength Index (RSI) turned to being technically overbought and the Moving Average Convergence Divergence indicator (MACD) made an extreme and the histogram was moving towards a cross to negative. Fast forward and it has shifted into reverse the last two days with the RSI now running lower and the MACD crossed and heading down as well.
GM
It is stalling at the 20 day Simple Moving Average (SMA) for now but if that does not hold, support lower comes at 28 and there is a gap to fill between 26.54 and 25.54. Filling the gap higher would suggest a short term pullback and continued strength. This picture becomes more interesting when you look at the chart for Ford (F), which has seemed to be a few days behind GM the whole ride higher.
F Ford
It is still making higher highs but with a RSI in the 80s. The MACD histogram has already started to fade and we may see a cross in a few days. It is also very far above the 20 day SMA. It does not have to continue to follow GM and turn lower but if it does, do you think that 20 day SMA 7.6% lower might be the first target?

Disclosure: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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