GM Decline Poised for $27.8

GM’s decline from $41.85 may be corrective longer term, but the recent $31.67 swing low fulfilled the 0.618 projection for Wave A, $41.85 – 31.7 – 38.15. This indicates the decline should continue because most waves that meet the 0.618 projection extend to at least the 1.00 projection, in this case, $28.0. This is near the 62 percent retracement of the move up from $18.72 to $41.85 at $27.56. These two factors, along with other sub-wave projections for the decline from $38.15, form a confluence point at $27.8. This is key target for the near-term and will likely be tested within the next few weeks. It is also a decision point for the longer-term. The confluence at $27.8 indicates it is a potential stalling point, but a weekly close below $27.8 would open the way for longer-term bearish objectives of $26.7, $24.0, and $21.8.

That said, a small double bottom may have formed at $31.67. This is a crucial area that has held so far, but October 7’s gap lower indicates $31.67 will not likely hold for much longer. Look for resistance at $34.2. The key level is $35.3. This is the 38 percent retracement from $41.85 to $31.67, and is in line with the 35.14 swing high. A close over this would call for an extended correction and attempt to confirm the double bottom with a close over $38.15. Confirming the double top would shift the long-term outlook to bullish and call for $44.6 and higher.

Published by

Dean Rogers, CMT

Dean Rogers, CMT is the general manager of the Kase Call Center in Albuquerque, New Mexico. He oversees all of Kase and Company, Inc.’s operations including research and development, marketing, and client support. Dean began his career with Kase in early 2001 as a programmer but has developed into Kase’s senior technical analyst. He writes Kase’s award-winning weekly Crude Oil, Natural Gas, and Metals Commentaries. He is an instructor at Kase's classes and webinars and provides all of the necessary training and support for Kase's hedging models and trading indicators for both retail and institutional traders.

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