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July 25 Chart of the Day - General Motors

General Motors (GM) reported strong revenue and earnings before the market open today.  For the quarter, GM reported top-line revenue of $44.7 billion, beating street estimates of $42.82 billion. GM's Q2 revenue rose 25% jump from a year ago and 11.8% sequentially. GM's adjusted earnings per share (EPS) came in at $1.91, versus the $1.65 the street was expecting.

One might think that its stock price sky rocketed on the open today, but actually it's trading down nearly 3%...

How can that be?  Well for starters, price can do whatever it wants whenever it wants for any reason.  And sometimes there aren't reasons.

But today, investors and traders seemingly shrugged off the earnings almost as if they didn't care because what appears to be on everyone's minds are the current UAW labor negotiations.

The current UAW contract is set to expire on September 14th, and the impact on the automakers' financial performance could be severe if negotiations fall short and a work stoppage occurs. 

From a price action technical analysis perspective, after reaching a definitive bottom around $30 last summer price has since been range bound between $31 and $41.

If and when the range breaks out price could visit $20-25 to the downside or $50+ to the upside.

But until the current union contract negotiations conclude we wouldn't be surprised to see price continue to ping pong up and down in the recent range.

So what's next?

Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

Take a look at the charts and let us know what you think.  

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