GM Stock Revs Up on Plant Closures

GM is shuttering three North American plants and cutting its salaried workforce

General Motors (NYSE: GM) stock is up this morning, as traders digest the company's production update. The Detroit automaker plans to halt production at three North American assembly plants -- in Ohio, Michigan, and Oshawa, Ontario -- and said it will end operations at two more plants outside of North America by the end of next year. GM will also cut its North American salaried workforce, and shift focus to electric and autonomous cars, scrapping production of the Chevrolet Cruze, Buick LaCrosse, and Cadillac CT6. CEO Mary Barra said, "We are righting capacity for the realities of the marketplace."

After being halted, shares of the car concern are up 5.6% to trade at $37.95 -- set to take out their 200-day moving average for the first time since June. GM had been trading in the $34-to-$37 range since an Oct. 31 post-earnings bull gap, finding support atop its 80-day moving average. Despite today's bounce, GM is still down year-to-date.

Analysts have remained bullish on GM, with seven of 10 issuing a "buy" or better rating. What's more, the current consensus 12-month price target for the stock is$44.85. From current levels, shares of GM would need to rally 18% -- and trade back near their June highs -- to meet this target.

On the other hand, optionstraders have become increasingly bearish over the past 10 weeks, with GM's 50-day put/call ratio of 0.49 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sitting higher than 90% of readings from the past year. This means that while calls bought to open have outnumbered puts on an absolute basis, traders have shown a much healthier-than-usual appetite for bearish bets of late.