PreMarket Prep Stock Of The Day: General Motors

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

Ho-Hum Year In 2020: After ending 2019 at $36.60, General Motors Company GM didn't rally with the broad market in January of 2020; Instead, it declined to $33.39. The issue began to move in sync with the market in February, falling to $30.50.

The bottom fell out in March and it surpassed its former all-time low from July 2012 ($18.72) by a wide margin. GM bottomed a few days ahead of the broad market on March 18 at $14.33 and began to rebound.

Whereas the S&P 500 index was back at its February highs and on to new all-time highs in late summer, GM didn't get to its February levels until October. It was able to make a new all-time high in November at $46.71 and retreated to end the year at $41.64.

Revving Up The Engine In 2021: After matching its December low ($40.06) on Jan. 5, it embarked on a huge rally in the "buy everything" bull market this month. The current leg of the rally peaked last Thursday with a new all-time high at $56.97. It posted its all-time closing high the previous day at $55.86.

Interestingly, it didn't end last week too far off that area, closing Friday at $55.40.

Moving With The Market: In Monday’s volatile session for the S&P 500 index, the same can be said for GM. Early in the session, the issue was in striking distance of its all-time high levels but retreated with the index to a larger degree. Perhaps it can be attributed to its outsized gains for the issue compared to the index this month.

Whereas the index was up just over 2% from its year-end closing price to its all-time closing high price, GM had tacked an astounding 33% rise from its year-end closing price ($41.64 to $55.40).

Moving Forward With The Fundamentals: It's difficult to determine if the price action on Monday is just a pullback in a strong uptrend or a major reversal of the bullish trend in place since March.

On Jan. 5, GM announced total sales for the quarter were up 5% year over year. The company had its best fourth-quarter retail sales since 2007, with deliveries up 12%. Investors will have to have until Feb. 10 to determine if the uptick in sales will translate to the top and bottom line.

Also, bullish investors are banking on the company making strides in capturing more share of the electronic vehicle market.

Moving Forward With Technicals: While Monday's price action has put a dent in the bullish trend, the issue has rebounded nicely off its intraday low ($51.02) at $52.75 as of 2:35 p.m. ET. While considering the magnitude of its January rally, it's really nothing at all.

It may be prudent for investors to track Monday’s low. If that level is breached, the next daily support level is down at the pair of lows from Jan. 14 (49.33) and Jan. 15 ($49.33).
Disclosure: The author of this article is long shares of General Motors