The chart for General Motors (GM) shows an amazing two year run that is taking a pause near its all time highs (for the new GM that is.) The company reported strong sales a couple of days ago, still it met significant supply around $38. I am looking to get involved if GM is able to punch through $38. The company hasn’t traded above $40, so I can’t define a price target. In this case I’ve found it useful to use a trailing stop based on the 14 period ATR (about $2 at the moment.) The theory is that the trailing stop should not be triggered by price moves that are not unusual for the stock. I usually use a 2x ATR trailing stop or $4 in this example.
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- GM Daily Chart
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- GM Weekly Chart
