The General Motors Company (NYSE:GM) has been under bear control since January. Currently, at a price of $38.72, the stock may be moving to find support at $35. Investors may, therefore, prepare to buy the stock.
General Motors is an A-rated value stock. At a price of $38, the stock is trading at a forward PE of only 5.78 and a PEG ratio of 0.59. We project the fair value of the stock to around $60. These metrics indicate that the stock is undervalued by the market and it may be the time to buy.
Analysis shows that the current pressure on GM is not due to any major fundamental deficiencies. Instead, the company’s valuation declined as investors shifted attention to other stocks that seemed to offer more opportunities for growth. Demand is set to return for the stock as soon as investors realize it is trading at the year’s lowest level. As a result of that, the price will rally.
RSI nears the oversold region for General Motors
Source – TradingView
At a valuation of $38, General Motors just slipped below the 200-day moving average. Both MA-10 and MA-20 are trading below MA-50. Further, technical analysis indicates the RSI at 31.99. As soon as it hits 30, it will trigger a buy signal for many investors and traders watching the stock.
We project that this will happen at a price of $35. After that, the stock will rally to $54 before hitting the $60 resistance level. Buying now gives the investor an opportunity before the technical traders pour into the market to drive the price up.
Summary
General Motors is trading at the year’s lowest at the price of $38. Below this price, the RSI will hit $30, triggering a buy signal that will result in the stock’s appreciation. Buying now gives investors a lead on the market.
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