The General Motors share price fell steeply on Wednesday despite positive earnings that beat market expectations.
The dampener for investors was the uncertain outlook offered by the company as a result of the global shortage of semiconductors and the rising cases of the delta variant of COVID-19.
GM reported adjusted earnings of $1.97 from March to 30 June, which was a vast improvement from the pandemic-induced loss per share of $0.50 for the same period a year earlier. This number also beat estimates of $1.85. Revenues more than doubled from $16.78 billion to $34.17 billion, also exceeding expectations.
Despite raising its earnings projections, the company said it was expecting COVID-19 and the semiconductor shortage to serve as headwinds to its forecasts. This drove the GM share price down steeply by 8.69% on the day.
Technical Outlook for GM Share Price
Price is now testing support at the 52.50 price mark. A breakdown of this price level opens the door towards 51.87, with 50.20 serving as additional support.
On the other hand, bulls will benefit from a bounce on the 52.50 support, targeting 54.17 initially. A push towards 56.00 cannot be ruled out if bullish momentum is strong, with 56.82 serving as additional resistance if the advance continues.