General Motors: Technical Momentum and Strategic Shifts Signal Near-Term Opportunity

The recent upgrade of General Motors' (GM) Relative Strength (RS) Rating to 72—its highest in years—marks a pivotal moment for the automaker. While the rating remains below the historically significant 80 threshold, it underscores a clear upward trajectory for the stock. Combined with its #2 ranking among auto manufacturers, a potential breakout above $61.24, and an upcoming earnings report on July 22, GM presents a compelling near-term opportunity for investors. However, the path to sustained leadership hinges on execution and market validation of its electric vehicle (EV) strategy.

Technical Catalysts: RS Rating and the $61.24 Breakout

GM's RS Rating, which measures 52-week price performance, has risen steadily from 69 to 72 in recent months. This improvement reflects short-term momentum but falls short of the 80+ levels often seen in market-leading stocks. will help investors gauge whether this upward trend is accelerating.

Technical analysts highlight a “cup without handle” formation in GM's price chart, with a critical breakout point at $61.24. A sustained close above this level—accompanied by heavy volume—could trigger a rally toward $65-$68, as institutional buyers step in. will be key to confirming this move.

The upcoming July 22 earnings report adds urgency. Analysts project Q2 2024 results to show resilience amid industry-wide challenges, including UAW strike impacts and EV production costs. A beat on earnings per share (EPS) could push the stock toward its breakout target.

Fundamental Drivers: EV Investments and Undervalued Valuation

GM's strategic pivot to electric vehicles remains central to its valuation story. The company aims for 40% of its offerings to be fully electric by 2025, backed by a $7 billion investment in U.S. battery and EV manufacturing. Partnerships like its EVgo charging network expansion and Samsung's battery tech collaboration signal progress.

Despite these moves, GM trades at a forward P/E ratio of ~12—well below peers such as Tesla (43) and Ford (16). highlights its relative affordability, especially if EV profitability materializes.

Challenges and the Road to RS 80

GM's Cruise autonomous division and China market restructuring remain headwinds. Legal disputes and delayed product launches could weigh on margins, while UAW negotiations pose ongoing risks.

To sustain momentum, GM must surpass the RS 80 barrier—a level historically associated with dominant market performers. This would require consistent earnings growth, a successful EV rollout, and a reduction in legacy costs.

Investment Thesis: Monitor Volume and Earnings

Investors should treat the July 22 earnings as a near-term catalyst. A positive report could validate GM's transition to EVs and boost confidence in its $72 price target (BofA's current call). However, the breakout above $61.24 must be confirmed with robust volume to avoid a false signal.

For long-term investors, GM's undervalued P/E and sector leadership (#2 in Auto Manufacturers) offer a margin of safety. Yet, the stock's trajectory depends on breaking through RS 80—a milestone that would signal broader market adoption of its turnaround story.

Final Take

General Motors sits at a crossroads: its technical momentum and strategic bets on EVs position it for growth, but execution risks linger. . Investors should use the earnings report and $61.24 breakout as entry points, while keeping a close eye on whether the RS Rating can climb into the 80s. For now, GM is a stock to watch—cautiously bullish, but not yet fully in the winner's circle.