Photo: Courtesy of Thomas Hawk on Flickr

General Motors Co GM unveiling its electric Chevrolet Silverado on Wednesday at the virtual Consumer Electrics Show in Las Vegas. The full-size pickup truck, which will go on sale in 2023, will compete directly against Ford Motor Co’s F electric F-150 Lightening.

Wedbush analyst Daniel Ives maintained an Outperform rating on the stock and a price target of $85 but added that in a bull case scenario, GM shares could reach $100.

GM has soared over 23% from the Dec. 20 low of $53.14 to reach a new all-time high of $65.98 on Tuesday. On Wednesday, the stock was looking to print an inside bar to consolidate the move higher. If the inside bar breaks bullishly to the upside on Thursday, GM could be in for another big trek north.

The GM Chart: The consolidation with an inside bar, on perhaps the daily chart but at least on lower timeframes, is needed because GM has barely confirmed its uptrend, putting in just one higher low since bouncing up off its Dec. 20 bottom. The 6% jump GM made on Tuesday created some signals the stock was becoming extended, which also indicated consolidation was likely to follow.

GM’s relative strength index (RSI) hit the 70% level on Tuesday. When a stock’s RSI nears or reaches the 70% level, it becomes overbought, which can be a sell signal for technical traders. When GM printed its previous all-time high of $65.18 on Nov. 18, the RSI hit about 73% and, consequently, the stock retraced about 11% over the seven trading days that followed.

GM has two gaps below that are likely to be filled in the future because gaps on charts fill about 90% of the time. The closest gap, which was left behind on Tuesday, falls between $61.52 and $61.96. The second lower gap is between the $59.05 and $59.74 range and was left behind on Monday.

GM is trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day, both of which are bullish indicators. The stock is also trading above the 50-day simple moving average, which indicates longer-term sentiment is bullish. The stock has become extended from all three moving averages, however, and Wednesday’s consolidation will help the moving averages catch up to the stock price.

• Bulls want to see continued sideways consolidation and then for big bullish volume to come in and drive GM up to a new all-time high. Above $65.98 there is currently no resistance in the form of price history.
• Bears want to see big bearish volume come in and drop GM down below a support level at $63.44, which would put the stock in range to fill the closest gap. Below the level, GM has support at $60.72 and $59.33.

(Click on image to enlarge)