The chart may seem to be "out of the woods" here and ready to rally, but it basically only cleared the "aggressive sellers" that sold GE down hard after the last earnings report. It also is running into the last earnings report (supply). It appears to me that $26.50-$27.00 is massive resistance and a low-risk zone to sell short against because this is the area where long term holders of GE were exiting in the November-January time frame. I think additional sellers will come out here and we can "lean against" that supply by selling short here and looking to cover down near $25-$24.50. The previous earnings report held the decline and confirmed that area as support. Earnings are out for last quarter and reported last week. The raw facts about GE's revenues and after-tax profit margins reveals a flat underlying performance for the company and I would look for flat stock performance for the next year or more.
Comments
DanV
⋅
Tim, congratulation for this excellent chart combining with your fundamental observation. I don't have much grasp of the companies fundamental though I would readily agree with your comments. Like your self I have been eyeing this one for long term short position using Options. Don't have data prior to 1988, however, using the monthly chart it is noticeable that this stock made a generational top in 2000. From the other market data we know that after 1972 market corrected till about 1984. So from that perspective we have at the minimum a correction of move from 1984-2000 (last cycle), but probably much longer. Therefore, many might not agree but this stock is destine to retest 2009 low or even make a new lower low. Here is my chart with Monthly time frame showing that it has completed the retracement already. Then on the daily chart that follows you note that it has made 1st impulsive leg of minor 5 waves move to the downside and are now retracing that with possible top in the region of $27.25. So again it is excellent work and don't take any notice of those who always know better but are afraid to put in in public. and
timwest
⋅
GE never was able to get a low of the day above the mid-point of the EPS release "green triangle" labeled. Now that the price range expanded down, it shows the buyers failed to overcome the sellers. GE is an ATM for longs to lighten up on positions. This trade is working here and looks poised to keep going down to 25-24 or another 4% down.