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A Correction in the Autos


The technical tale of two auto companies: Ford Motor Co. (F) and General Motors Company (GM).

Although F might have ended a significant correction at its Dec 24 low of 15.10, let's notice that, so far, recovery strength has been unable to climb above the curling over 200-day EMA, now at 15.74, and the extension of the prior dominant up trendline off of the Aug, 2012, low at 8.82, and which cuts across the price axis at 15.90.

Unless, and until F climbs and sustains above 15.75/90, the price action will continue to point to a forthcoming retest of the recent low at 15.10, which if violated, will point lower, towards a target zone of 14.80/40.

GM, meanwhile, offers a much healthier technical set-up at the moment, with the price structure also in the midst of a correction, but so far the weakness has been contained above the 50-day EMA, now at 39.15.

That said, my near-term pattern work argues that GM should loop down again for a retest of the Jan 3 low at 39.00, which needs to contain the selling pressure to avert a deeper press into the 38.30/00 support zone prior to my expectation of the emergence of a new upleg to new high territory above 41.48.

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