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Stocks Up, GM Is New Leader; Will This Warren Buffett Stock Win In Q4?

General Motors (GM), one of the first automakers to venture into electric-hybrid and all-electric vehicles for the North American market, proved the historical point that companies with engaging new products and futuristic strategies can unleash brand-new breakouts.

X GM, which broke out of a well-formed multimonth cup with handle at 36.73 on Sept. 1 in heavy volume, burst ahead more than 3% to 43.46 in volume that bulged 158% above its 50-day average.

That gain helped the S&P 500 rise for a sixth straight session as the large-cap benchmark added 0.2%, in line with the Nasdaq composite. The Dow Jones industrials, seeing three of its 30 components rise 1 point or more, outperformed by a touch, advancing nearly 0.4%.

The S&P SmallCap 600 reversed from light losses intraday to end up 0.2%.

Volume rose slightly on the Nasdaq and fell on the NYSE, according to early data.

GM is not part of the Dow Jones industrial average anymore, but with a $63 billion market cap and $161 billion in trailing 12-month sales, it still shows the heft to be one.

GM, which on Monday announced an aggressive plan to debut 20 new battery- and fuel-cell-driven vehicles globally by 2023, is clearly showing outperformance as its relative strength line has zoomed into new high ground. The RS line, painted in blue in all IBD charts, rises when a stock is beating the S&P 500.

At 43.45, GM is now up 18% from the proper entry. The recent cup with handle passes the midpoint test; the handle's midpoint is 35.61, higher than the cup's midpoint of 35.24.

GM's 85 Relative Price Strength Rating is solid, yet lags those of Jeep and Dodge truck firm Fiat Chrysler (FCAU), China's BYD (BYDDF) and Italian sports car maker Ferrari (RACE) in IBD's automakers industry group, as seen in IBD Stock Checkup.

Elsewhere, Credit Acceptance (CACC), which was selected by the Warren Buffett stock screen in IBD's MarketSmith premium service, is trying to clear a 281.77 buy point in a six-week flat base pattern. Shares are up more than 1% for the week at 283.31.

The specialist in subprime auto loans has shown a remarkably steady record of double-digit profit and sales growth. Over the past eight quarters, earnings per share rose 16%, 22%, 17%, 22%, 20%, 20%, 16% and 19% vs. year-ago levels, while sales expanded 15% to 18% over the same time frame.

The stock's P-E ratio over the trailing 12 months stands at 15, lower than the S&P 500 itself.

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