Toyota Motors (TM) surged above its early October price on Monday with a high of $126.10. While the chart shows some reasons to be cautious here including resistance at prior highs and testing the 40-week moving average from the underside. However, the price action is very positive and we can see the relative strength in the shaded area chart is at 6 month highs. It is also trying to break the four-year down trend in relative performance. The SCTR shows the price action behaving better than 79% of its market cap peers. The SCTR is an indicator that compares the price moves of a stock against a basket of other stocks to see which has the fastest movement. The momentum trend has turned up as shown on the PPO. This stock looks to have all of the hallmarks of an initial move.
Honda’s chart is not quite as bullish. First of all, the chart in general over the last five years has been drifting top left to bottom right. The SCTR at 85 suggests the recent price action is some of the best price action out there. With the relative strength improving to new six-month highs, this is bullish. On the longer term though, this stock continues to underperform the $SPX. Can it break out in relative performance? This is the highest full stochastic surge that pushed higher than the 50 level. The price action is similar to Toyota sitting near previous highs and the 40-week moving average. This is a nice trend line breakout and the PPO momentum is just turning up. While it is a good-looking breakout, some of the longer-term trends might suggest looking elsewhere.
The slope of the Fiat Chrysler chart rose through 2017. With a pullback in 2018 on all of the auto charts, we need to see this one break the down trend. Notice how the SCTR has not started to accelerate yet. The full stochastic is usually one of the earlier signals which suggests the price might start moving. The difference in the indicators shows this stock is a little farther behind, but the chart could pop at any time here based on an industry move.
GM had a big week last week. The big surge pushed the stock higher. I used a line chart here just to show the difference the display makes. The chart made a higher closing low in December and bounced off support at $34. That higher low in December contrasts with dramatically lower lows on the indexes. All the other indicators look really strong. The upslope in relative strength is good. The full stochastic bouncing around the 50 level is really positive. I particularly like the break out on the PPO indicator.
All of these charts are trying to break higher while the indexes are up near resistance. This is a timely place to be cautious, as the charts in general have had a three-week run. If there was a small pullback, these charts look like the industry group might have some interested investors hitting the buy button. As some of the moves up last week were 10%, these charts could be big gainers.