Saturday, February 10, 2007
General Motors
General Motors
Sell time again?
This company is in the biggest financial crisis ever. If that’s not reason to sell, maybe the trends will be. This stock is a dumper, now.
The only true support that I see for this stock is at the price per share of $20, breaking through twenty could mean this stock becomes a penny stock. If you look at the trend lines since this company’s peak at $80 a share you will see two things, the first being that all the trend lines were down, the second would be the amount of pressure by the 200 week moving average to keep this stock down.
Even Kerkorian himself, the previous number one investor in GM dumped his portion of GM to invest more into his thriving vegas real estate and gambling empire. He stuck with GM through thick and thin but apparently prices in excess of $25 per share were the right price for his tattered GM stock. He sold out completely, in a time of less than a week he had dumped every last share.
No longer does this brand, as an investment, carry any namesake or weight to it. I thought that the company’s best shot would lie in the strength of Kerkorian’s name as one of the best investors this world has seen.
The stock has recovered slightly from decade lows of $20 per share and now trades at almost $34 per share. As far as I’m concerned, the price of GM should be $20 right now. A fall to $20 per share would represent a 42% loss, good enough for an investment in my book.
Just look at the trend, that’s all you really need to see. The last few months of gains were bounce from the $20 mark. GM should take another dive to $20 again, and very soon according to this chart. I expect fully GM to touch $20 by the end of 2007.
I recommend trading this play with options. Options are one of the best ways to leverage your investment into a really big gain. Options for Jan08 would be best because of the timeframe