Detroit's Big 3 Automakers Look Charged Up For Earnings

Detroit’s "Big Three" automobile manufacturers have set out to rival Tesla Inc TSLA by speeding up plans to transition to electric vehicles.

The electric future for Ford Motor Company F, General Motors Company GM and Stellantis STLA have made the companies popular with traders and investors and the three stocks have recently hit new highs.

After a period of consolidation, the automakers look like they may make a run-up into their earnings release dates.

Ford is expected to report earnings April 28 and both General Motors and Stellantis will report on May 5.

The Ford Chart: After hitting a three-year high of $13.62 on March 15, Ford’s stock consolidated and set up a right shoulder of a bearish head-and-shoulders pattern. On Tuesday, the stock reacted to the pattern and fell 6% over the course of the day.

The bear volume wasn't substantial, however, and a support level at $11.30 stopped the stock from completing an 18% measured move down that could have otherwise been possible. The measured move of the head and shoulders pattern is calculated by measuring the distance from the neckline to the top of the head in a head and shoulders pattern.

Ford’s stock is trading at the eight-day exponential moving average (EMA) but below the 21-day EMA, which is bearish. On Thursday morning, the stock attempted to break above resistance near the $12 mark but rejected.

Bulls want to see bullish volume come into the stock to help it regain support at $12.07. This would also help Ford’s stock to trade back above the eight-day EMA. If Ford’s stock can regain the $12.07 level, it has room to move up to $12.92.

Bears want to see Ford’s stock continue to reject the $12 level. If the stock can’t regain that level it could fall back and retest support at $11.30.

See Also: Chip Shortage Prolongs Ford Production Halt At 5 North American Factories

The General Motors Chart: On Tuesday, GM's stock lost support at $56.88, which caused the eight-day EMA to cross below the 21-day EMA which is bearish. Support at $54.50 held, and on Wednesday GM was able to bounce up and pop back over $56.88 and on Thursday morning GM retested that level as support and it held.

GM's stock is trading slightly below the eight-day and 21-day EMAs, which is bearish, but the stock could easily regain both with increasing bull volume.

Bulls want to see $56.88 hold and for GM to pop up to regain the EMAs. This would cause the eight-day EMA to trend back on top of the 21-day EMA, which would give bulls more confidence. If the stock can continue to hold above its support level it has room to make a run back for its new all-time high of $63.44 made on April 6.

Bears want to see GM continue to test support at $56.88 to weaken it. If the stock can’t hold the level as support, it could retest the $54.50 area again.

The Stellantis Chart: Like Ford and GM, Stellantis’ stock dropped on Tuesday. Likely GM and Stellantis moved in sympathy with Ford’s stock reaction to the head and shoulders pattern. Stellantis also left a gap overhead on Tuesday, which is likely to be filled within the next few trading days. The gap coincides with a resistance level at $17.65 and if the stock can fill the entire gap, it will regain that level as support.

Stellantis is trading below both the eight-day and 21-day EMAs and on Thursday the eight-day EMA crossed below the 21-day EMA. A move up to fill the gap would reverse this.

Bulls want to see Stellantis recapture $17.65 for a move up to test resistance at $18.52. If Stellantis can pop over that level, it has room to move up to retest the stock’s three-year high at the $19.50 mark.

Bears want to see the eight-day and 21-day EMAs continue to push Stellantis’ stock down until it loses support at $16.70.