Stock of the day: General Motors Company
30 June 2023
This analysis highlights the potential for a major buying opportunity on the chart of GMC. The instrument has created a significant inverse head and shoulder pattern since mid-March, depicted in yellow on the chart. The 'head' of this pattern interestingly coincides with a false breakout below a crucial dynamic support, marked in grey.
Currently, the price action is concluding the right 'shoulder' of the pattern and is positioned just under the 'neckline' of this formation, drawn in black. According to technical analysis principles, breaking out above this neckline would deliver a substantial long-term buy signal.
Adding to this bullish scenario, a noteworthy downtrend line marked in red was breached at the start of this month. This line was tested as a support a few days ago, with the price bouncing off, aiding the formation of the right shoulder.
In summary, if the price ends a day above the neckline, it could trigger a significant long-term buy signal. The likelihood of this happening appears quite high at present, making GMC a potential asset to watch for those interested in long positions.