U.S. automakers have lifted off corrective lows following reports of Chinese trade negotiations, but dip buyers should remain cautious because these cyclical issues have incurred technical damage in recent months, breaking bullish patterns and entering potential downtrends. At a minimum, it is wise to let other folks risk their hard-earned capital at this juncture while the rest of us watch price action from the sidelines.
In addition to tariff threats and higher steel prices, automakers must contend with an aging economic cycle that is undermining comparative monthly sales. Many analysts believe that the group has already posted a cyclical top, exposing a long-term downtrend when broader economic growth slows or stalls in coming years. Volume action in the biggest players confirms those bearish convictions, with institutions quietly closing out long-term positions. (See also: How the U.S. Automobile Industry Has Changed.)
U.S. automaker stocks are bouncing at support but have broken bullish patterns and could hit lower lows in coming months. …read more
Read more here: Avoid U.S. Automaker Stocks Despite Trade Talks
Category: GM, F, TSLA