GE Bear Flag for NYSE:GE by samcco09

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Watch for GE to make a move to retest the lows around $5.50 a share. GE has found temporary support at $6.00 and is forming a bear flag pattern. The hour chart on the right shows respect of the minor trendline of the flag. Look for a break in the trendline before going short.

GE had a wide miss on earnings last week, driving share prices down on heavy selling volume . This current rally is occurring on very light volume , contrary to what we should be seeing on a reversal. COVID-19 will continue to affect GE's retail and aerospace sectors, with engine demand way down.

Short position should be re-evaluated at the lows around $5.50. A break above resistance in the $6.50 zone should invalidate this idea.

This is an idea only, and should not be considered investment advice. Trade according to your own rules and risk tolerance.

Comments

Thanks for sharing

I challenge anyone who tries to use patterns in aerospace (GE, JBLU, LUV, etc...). This has nothing to do with patterns. Its sentiments about flying, military funding, and materialization of an airline rebound. Could be a great opportunity to buy in to a strong company with a large long term upside.

Chrisbolsinger3

@Chrisbolsinger3 I somewhat agree with what you’re saying. Long term, GE is a buy because of the things you have listed: an airline rebound and a change of sentiment on COVID related risk will boost GE big time. However, the environment is too risky for a rebound right now imo. Airlines continue to lay off employees, airline travel demand will not increase for at least the next 6 months. Patterns don’t tell the full story, but they do help give an insight into the trading psychology (seeing other people’s buying behavior). In a scared market, psychology is all we have. Best of luck!

Good job

Great analysis, good luck!

Thanks for sharing your opinion, all the best