Weekly Pick: GM
Classic PEG flag setup
GM is in a tight post-earnings bull flag on the Daily after tagging an all-time high on 7/29.
Add a high Tier 1 score in my model, a forward P/E under 6, improving earnings, raised guidance, heavy institutional ownership, and strong options liquidity and there’s enough in this boring name to get me interested.
General Motors Company
General Motors is one of the world’s largest automakers, designing, manufacturing and selling vehicles primarily under the Chevrolet, GMC, Cadillac and Buick brands. Its business spans trucks, SUVs, passenger vehicles and electric vehicles, along with financing through GM Financial.
Fundamentals & Ownership
Market cap: $77B
Institutional ownership: 89.4%
Short float: 2.8%
Forward P/E: 5.84
EPS growth this year: 26.3%
GM raised full-year guidance again following its most recent earnings report.
Technicals
On the Daily, the post-earnings breakout has consolidated into a tight bull flag with price holding above a fully bullish EMA stack.
On the Weekly, price remains above the 8, 21, 50 and 200EMA and continues to make higher highs.
On the Monthly, the longer-term breakout remains intact with price well above rising long-term moving averages.
Daily
Weekly
Monthly
Risks
GM remains a cyclical, capital-intensive automaker and revenue growth is modest.
How I’m Trading It
Shares + December calls, likely the $92.50 strike.
I’m looking for continuation out of the post-earnings flag and would prefer an entry near current levels rather than chasing a gap higher.
A break of the recent consolidation is the first warning. A sustained move below the 21EMA ~$84 would invalidate the setup.
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