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GM - Bullish Breakout after Earnings

GM has been rallying since making a low on the year around 24.60. Last week, it started to stall around 33.60 as it tested a falling trendline seen in the daily chart. Today (10/21) GM posted adjusted EPS of $1.50, which beat estimates around 1.15-1.19. The market bought GM and the stock price shot up above the falling trendline, giving a bullish signal.

GM Daily Chart 10/21


(click to enlarge)

With the current breakout, which reflects a major shift against the prevailing downtrend, maybe we should start considering buying on a dip. 

I would love to see a pullback towards 30. If price does pullback to this area and find support, while the daily RSI falls back around 40 and starts rolling back up, I would consider buying with a bullish outlook towards the 38 handle, a common resistance area seen in the weekly chart.Even a stop below 24.00 can yield almost a 2:1 reward to risk ratio based on the noted entry and target.

GM Weekly Chart 10/21


(click to enlarge)