Bank of America, Ford, General Motors price analysis roundup

Written by: Stanko Iliev
December 31, 2020
  • The U.S. stock market has advanced in 2020
  • Morgan Stanley reported that banking stocks could rise at the beginning of the 2021 year
  • The next year will be competitive for the global auto industry

The U.S. stock market has advanced in 2020, putting it on track to gain a second straight year. Wall Street’s three main indexes surged to record highs this week as investors hope that a fiscal stimulus and coronavirus vaccines will drive a robust economic recovery in 2021.

The S&P 500 SPX has rallied around 15% in 2020, the Dow Jones Industrial Average (DJIA) is on pace to end up 6.6% for 2020, while the Nasdaq Composite (COMP) has advanced more than 40%.

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The U.S. still needs to face the COVID-19 challenges, and the FED announced that it would support the economy for as long as needed using its full range of tools. There is still a long way to fight against the pandemic; many big companies will have a further drop in revenues and face liquidity problems.

Morgan Stanley reported this Monday that banking stocks could rise at the beginning of 2021 year and it is also important to mention that the Federal Reserve will allow share buybacks starting from January. The biggest U.S. banks with enough capital to withstand losses would be permitted to pay out dividends and buy back stock on a limited basis.

Bank of America shares are trading again above the $30 level

Bank of America shares have advanced from $23 above $30.5 since the beginning of November, and the current price stands around $30.13.

Data source: tradingview.com

The critical support levels are $25 and $20; $32 and $35 represent the important resistance levels. If the price jumps above $32, it would be a signal to buy Bank of America shares, and the next target could be around $35, but if the price falls below the $25 support level, it would be a firm “sell” signal.

Ford shares remain in a bull market

The next year will be competitive for the global auto industry, but even with the COVID-19 pandemic, Ford cars’ sale is going well. Despite this, the stock price has weakened in December, but there is no risk of the bear market.

Data source: tradingview.com

When we look at the chart above ( one year period), we can see that the price of this stock has advanced from $3.96 to $9.50, and as long the price is above this trend line, this stock is in the “buy” zone. The current supports levels are $8 and $7; $9 and $10 represent the current resistance levels.

If the price jumps above $9, it would be a signal to buy Ford shares, and we have the open way to $9.5 or even $10. If the price falls even more in the upcoming period, every price in a range from $6- $7 could be a very good opportunity to invest in Ford shares.

General Motors shares have found strong support above $35

General Motors is a stable company with a good position in the market, but this company is a little expensive at the current share price.

Data source: tradingview.com

Technically looking, General Motors’ shares remain in the bull market, and the first sign of the trend reversal will be if the price falls below $35 support. If the price jumps above $45, it would be a signal to trade General Motors shares, and we have the open way to $47.

Summary

The U.S. stock market has advanced in 2020, putting it on track to gain a second straight year. Wall Street’s three main indexes surged to record highs this week, but the U.S. still needs to face the COVID-19 challenges. Morgan Stanley reported this Monday that banking stocks could rise at the beginning of 2021 year and it is also important to mention that the Federal Reserve will allow share buybacks starting from January.