Stock Of The Day: Market Memory Keeps GM Under Key Levels As 2025 Silverado EV Set To Launch

General Motors GM is set to launch its 2025 Chevrolet Silverado EV, offering options at different price points. This strategic pricing reflects how markets have a memory, with key price levels often maintaining their influence for weeks, months, or even years, affecting both stock movements and investor sentiment.

This dynamic can be seen on General Motors’ chart, which is why it’s our Stock of the Day.

In August 2021, the $49 level supported the stock. Four years later, the market “remembers” that it’s important. Now, it's a resistance level.

Support can become resistance because some people who bought the stock will regret it if the support eventually breaks and the price goes lower. They will regret their decision to buy because, when this happens, they are looking at a loss.

Some of these remorseful buyers decide to sell. But they don't want to lose money.

So, if the shares eventually rally back to the price they paid, investors will try to exit their positions.

If enough of these remorseful buyers place sell orders, what had been a support level will become a resistance level. This is what has happened at $49 for GM.

As you can also see on the chart, the stock “remembered” that the $41.50 level was important. It was resistance from August 2022 until August 2023.

Read Also: General Motors’ Silverado EV Work Truck Model Now Starts at $57K

This memory is also due to buyer's remorse.

Some of the investors and traders who purchased their shares while they were trading at this level soon realized they had made a mistake when the price dropped. They decided to sell, but they didn't want to lose money.

Because of this, when the stock rallied back to resistance, they placed sell orders to get out at breakeven. This large concentration of sell orders created resistance at the level again.

In the stock market, price levels that had been important before can become important again. The market can remember which ones were.

Savvy traders know this. They understand that if and when a stock returns to what had been an important price level before, it can become so again.

This means there is a good chance of a reversal and an opportunity to profit.

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