GE Is Trading in the Stratosphere, But That Doesn't Mean Buy It Now
Here's how traders should play it.
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Shares of General Electric GE continue to trade northward. At one time it was one of the original members of the Dow Industrials until it was dropped in 2018. Most people my age remember it well when it was on a pedestal when Jack Welch ran the company. Unfortunately the affairs of the company unraveled and eventually GE resorted to a reverse stock split—a 1-for-8 - in 2021.
Today the company's board approved a spin-off of their energy business, GE Vernova to begin trading April 2.
Let's check out the charts.
In this daily bar chart of GE, below, I can see that prices have nearly doubled in the past twelve months or so. Impressive. Prices trade above the rising 50-day moving average line and above the rising 200-day line. Trading volume does not show a pattern of expansion and that is disappointing.
The daily On-Balance-Volume (OBV) line shows improvement since November. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but has started to narrow.
In this weekly Japanese candlestick chart of GE, below, I can see that prices are up three-fold from their 2022 nadir. Again no expansion of trading volume but the rest of the indicators are positive. With prices trading at 50% above the 40-week line I would be cautious.
In this monthly line or close only chart of GE, below, I can see the price history going back to the mid-1980's. Prices are still in a downtrend from the peak set in 2000.
In this daily Point and Figure chart of GE, below, I can see that prices have reached and exceeded a price target in the $132 area.
In this weekly Point and Figure chart of GE, below, I used a five box reversal filter and can see that prices have reached and exceed a price target in the $127 area.
Bottom line strategy: I cannot recommend purchasing GE in the stratosphere. Traders who may be long GE from lower levels should raise stops to $140.
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