Normal Motors announced a halt in production at several North American plants and Ford introduced further downtime at two vegetation, the most recent disruptions to the auto provide chain due to a chip scarcity.

Shares for GM had been down 1% on Thursday, the day of its announcement. Ford closed down practically 2%.

Each shares have risen greater than 40% for the yr, regardless of the persevering with manufacturing points.

JC O’Hara, chief market technician of MKM Companions, recognized one technique to get publicity to the auto shares with out the headwind danger.

“Used automobile gross sales are by means of the roof so one play that I am very interested by right here is CarMax. They’re an enormous used automobile gross sales firm, and the positivity from used automobile gross sales is being mirrored within the chart,” O’Hara instructed CNBC’s “Trading Nation” on Thursday.

CarMax has rallied greater than 100% over the previous 12 months. Shares are up 36% simply this yr.

Gina Sanchez, chief market strategist at Lido Advisors and CEO of Chantico International, warned that the chip scarcity is “one thing that is most likely not going away.”

With Ford and GM transferring into electrical autos, Sanchez famous, “the outlook for Ford is considerably higher than GM, primarily based on the concept they’re actually transferring into the electrical automobile area, however what’s fascinating about that’s that electrical vehicles are going to require extra chips, not much less.”

“Suppliers simply didn’t stockpile sufficient chips as a result of auto demand plummeted throughout Covid, and so now they’re simply caught on the mistaken foot, and it isn’t really easy to simply order up extra chips,” she stated in the identical interview. “That is going to take most likely a number of months to work by means of, and it is going to dampen the restoration for the auto sector.”

Nonetheless, for long-term buyers, O’Hara stated GM and Ford might current a extra steady alternative over extra unstable electrical car makers comparable to Tesla.

“We have an opportunity to maneuver into decrease volatility names. GM and Ford, who are actually checked out as EV performs. I feel you’ll get a pullback and I feel that pullback is buyable,” stated O’Hara.

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