Ford, GM Look Revved Up For New Highs

Competition in the electric vehicle sector continues to heat up as traditional manufacturers unveil their electrification and battery development plans and roll-out new models.

General Motors Co GM and Ford Motor Co F have also seen their sales steadily increasing. On Thursday, Ford announced its electric vehicle sales for May had climbed 184% and GM said it expects to beat its previous guidance for the first half of 2021.

Traders have become highly interested in these two automakers’ stocks as Ford and GM transform their vehicles and both stocks have made new highs.

See Also: How to Buy Ford Stock

The Ford Chart: Ford’s stock reached the highest level it had traded at since April 2015. Big bullish volume has been consistent in Ford’s stock for the past five trading days and on May 27 increased volume in the premarket caused Ford to gap up when the market opened. Because gaps are filled 90% of the time, it's likely Ford will retrace down to fill the gap left behind at the $14 at some point in the future.

Ford is trading above the eight-day and 21-day exponential averages (EMAs), with the eight-day EMA trending above the 21-day EMA, both of which indicate further bullish price action is in the cards. Ford’s stock is also trading above the 200-day simple moving average (SMA) indicating the overall sentiment in the stock is bullish.

Ford’s 7% upward move on Thursday did cause the stock to become a little extended from the eight-day and 1-day EMAs so, in the coming days, bulls may want to see some consolidation so that Ford can recharge for another move north.

Bulls want to see Ford close Friday’s trading session above resistance at the $16 level. If Ford’s stock can regain that level as support, it has room to move up toward the $17 mark.

Bears want to see Ford’s stock reject $16 as resistance and for the stock to drop down to retest the eight-day and 21-day EMAs as support. If those levels failed to hold Ford could revisit $14.23 and fill its lower gap.

The GM Chart: GM’s stock made a new all-time high on Thursday but didn’t get immediate follow through on the move. The stock managed to close two cents over its April 6 high of $63.44 on big bullish volume. GM also left behind a small gap on Thursday’s move at the $60.40 level that's likely to eventually be filled.

Like Ford’s stock, GM is trading above the eight-day and 21-day EMAs and last week the eight-day EMA crossed above the 21-day EMA, all of which are bullish indicators, and GM is also trading well above the 200-day SMA.

Bulls want to see GM get follow through on Friday and make a convincing new all-time high. Since there is no resistance in terms of price history above, GM could run further into blue skies if bullish momentum continues.

Bears want to see GM reject its previous all-time high as resistance and for the stock to drop back down toward the $60 level to fill the gap. There is also support just below the gap at $59.58 and if GM fell through that level it could revisit $56.88 before potentially bouncing.