General Electric; Still Positioned For Higher Levels

Industrial conglomerate General Electric Company (GE) after an already respectable run off the 2009 lows last Friday, post its latest earnings announcement broke past a multi-month resistance area to a new year to date high.

If we consider the below multi-year stock of the chart, two things stand out.  First, while not quite there yet, the stock is slowly but surely moving toward a major resistance area closer to the $27 mark, which is where the downtrend line off the top in the year 2000 comes in.  Given how long this downtrend has already been in the making we must give the resistance area some breathing room.  Thus I am circling an area between $26.90 and $28 as the next major resistance area, which would also coincide with the 61.80% Fibonacci retracement level from the October 2007 highs down to the early 2009 lows.

Second, the majority of the rally off the 2009 lows took place within the confines of an orderly up-trending channel, the top of which the stock has again reached, or if we squint – overshot, last Friday July 19th.

ge multi year

On the daily chart below it is noteworthy that while orderly in its ascent, General Electric Company (GE) has rallied roughly 38% since the summer of 2012.  The question here for the stock now becomes one of timing, as it so often does.  While the recent breakout to new year to date highs in the stock could run for another couple of days, I see it as unlikely for the stock to move toward the $26.90 and $28 in a straight shot.  More in line with the way this stock tends to act would be a re-test of the recent breakout area near the $24 mark, and in an overshooting scenario toward $23, which could offer better entry levels for those looking to trade the stock toward the aforementioned resistance levels.

ge daily chart








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