GM stock slips into bearish patterns ahead of Q2 results

General Motors shares declined from a year-to-date high of $87 in February to around $76 and have formed a double-top pattern followed by a bearish flag ahead of the company’s second-quarter earnings report this week. The price moved below the 23.6% Fibonacci retracement level and the 50-day exponential moving average.

GM reported selling 714,896 vehicles in the quarter, a 4% decrease from the same period a year earlier. Company executives attributed the decline to a decision to deprioritize some electric-vehicle programs and to discontinue certain models, including the Chevrolet Blazer and the Cadillac XT4. Despite lower deliveries, GM retained the top share of the U.S. market and ranked second in full-size pickup and large SUV sales, with GMC, Chevrolet and Cadillac contributing to relative strength.

Analysts forecast second-quarter revenue of about $47.09 billion, compared with $47.12 billion in the same quarter last year. Consensus estimates for the third quarter center near $48.38 billion, roughly 0.44% below the comparable period. Several analysts project revenue growth to resume in the next financial year. A recent industry report put the average new-car selling price at $49,758.

On valuation, GM trades at a forward price-to-earnings ratio near 5.95, below the S&P 500 average multiple around 20 and below the forward multiples of several peers. The company has about $5.5 billion remaining under its current share-repurchase authorization.

Analyst price targets diverge. One analyst lowered a target to $94 from $95 while keeping an outperform rating. Another raised a target from $98 to $110, and a third boosted a target from $108 to $131.

From a technical standpoint, the stock’s double-top formation and bearish flag followed the drop below the 23.6% Fibonacci level and the 50-day EMA. Technical models identify the 38.2% Fibonacci retracement, near $70, as a further reference point for downside traders if the price continues lower.

Market participants will focus on the earnings release and management guidance for details on vehicle demand, margin trends and capital-allocation decisions, including any change to the buyback plan. The company’s sales mix and adjustments to its electric-vehicle programs are likely to shape investor reaction in the hours and days after results are published.