General Motors (GM.us) stock is looking set to outperform Ford (F.us). The relative strength chart, with GM.us as the numerator and F.us as the denominator, has bullish developments. The green 5-week EMA has crossed bullishly above the orange 10-week EMA (blue circle) and the RSI has crossed to the bullish side of 50 (blue rectangle).
Similar signals have charted previously (blue dashed vertical), only to reverse six and half months later (red dashed vertical). However, if the RSI maintains above 50 for a sustained period, the EMAs will develop angle and separation to the upside, which would emphasise GM.us's outperformance over F.us.
According to Barrons, Vijay Rakesh from Mizuho upgraded GM.us from a Hold to a Buy. Rakesh cited the following reasons for his upgrade, "The UAW strike is in the rearview mirror, production has resumed, and we see idiosyncratic catalysts."
The stock-based catalysts include a $10 billion share repurchase plan that was recently announced and cost savings to counter the UAW wage increase.
HSBC has also given GM.us a Buy rating, whilst keeping F.us as a Hold.
Approximately 65% of analysts covering GM.us rate the stock a Buy, with a 40% premium set in price targets. On the other hand, slightly more than 45% of analysts rate F.us as a buy with a target near $13.25, which is 25% higher from current price levels.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.