GM has an outside reversal day

The technical definition of outside reversal is stock open higher and go higher than yesterday's high and intraday's low is lower than yesterday's low and closed near today's low.  What that means is the bull of the stock exhaust itself and give the stock last push before the bear take control. Outside reversal day don't happen often. But when it does, it usually mean an emotional top or bottom is put in. Also if the volume is high, that means the signal is strong.

 

GM's today's price action fitted the textbook definition of outside reversal. The biggest vol of trading YTD also add to the validity of this signal. The key is to watch next day's action, if there is follow through to today's action in next day's trading, it will be yet another confirmation of the outside reversal.

 

But one thing is still missing....

 

The reversal is not happening after a prolong uptrend. GM is not near to any recent high, rather it is close to recent low. My interpretation to this action is if there is no follow through to today's action (means price up in the next trading day), then more volatility still lie ahead. But the overall direction should be down.