Will GM Become The Next Ford?


As you’re likely aware by now, the good old Ford Motor Company (F), has been making some heads turn lately:

The carmaker had announced some ambitious EV plans back in May 2021 and the market noticed – shares have doubled since and nearly tripled from this time one year ago!

Our own Ben Sturgill has made some great trades in it too – here are the recent entries he posted in The Workshop, his live trading room:

And here are the exits:

I know – Ben’s good at what he does.

Today, though, I’d like to report on an interesting development by yet another legacy US automaker.

The question then becomes, will this other stock follow Ford’s blueprint?

GM’s EV Announcement

Ford’s EV inroads (and, likely, stock price advances) did not slip by their counterparts at General Motors (GM) – earlier this week, GM unveiled a fully-electric version of Chevy Silverado, the company’s best selling pick-up truck.

Here are some fresh pics from GM’s official website, just so you have an idea:

Not too bad, right?

The specs are solid too – GM promises 660 horsepower and over 400 miles of range. 

Better yet, this one comes on a budget – the company promises the base version of the truck, coming in 2024, will start at just $39,900! That’s a lot of EV for the price of a Tesla Model 3!!!

The initial consumer reaction seems promising as well – according to GM’s CEO, the truck’s most expensive version, the $105,000 RST First Edition, sold out within 12 minutes of opening up for pre-order!

 

What to Expect of GM Stock

But we’re not a car magazine, after all, hence, let’s focus on what this means for the GM stock.

While the news will attract a lot of attention, it is important to note that GM is not entirely new to the EV game.

The company’s Chevy Bolt EV had been one of the best-selling EVs in the world up until Tesla Model 3 showed up – hence, the “WOW” factor of the EV announcement may not be as profound as it was for Ford. 

That said, there surely remains a great deal of interest in electric pick-up trucks and the EV sector as a whole is still as hot as ever.

It’s only fair that both GM and Ford will hop the train with their best-selling vehicles. 

Here’s GM daily chart:

As you can tell, the initial reaction has been very positive, but the stock remains stuck in the $64 area. 

While I don’t view this announcement as a “game-changer”, this catalyst might be exactly what the stock needs to finally push through. 

Ideally, I want to see GM hold the $62 level over the next few days, reclaim $64 and then have a volume push higher, right into the $70-$75 area in the near term. 

It is also worth noting that despite the announcement and recent volatility, the options market hasn’t been overheated:

These aren’t cheap, but by no means expensive premiums for a stock that just gained $10 in 4 days. 

If the trade sets up above $64, I may pick up some $68-$69 calls.

Under $64 it’s a no-go for me, though – the resistance has just been too major to ignore.

 





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