Do Not Argue With Sellers – Celebrate With Buyers: GE EditionGeneral Electric (GE) dropped 4.0% for a fourth straight day of high volume selling. At $11.27/share GE sits at a stomach-churning 9-year low.
GE’s early June expulsion from the Dow Jones Industrial Index seemed like such natural ignition for a bottom that even CNBC’s Jim Cramer got off the fence to declare the stock a buy. At the time I proposed a lower risk method of playing a potential bottom using call options. The call option configuration certainly helped ease the pain of the recent 9-year lows. Still, with selling accelerating, the temptation to consider the conditions for a bottom is too great to resist. Sure enough, Guy Adami on Fast Money offered his keys for determining whether GE (or any stock) has indeed finally reached bottom:
A new 52-week low on heavy volume: this action can indicate a wash-out of sellers.
Management is up-front and addressing the problems with the business: hope remains the company figure things out.
The company remains in a viable industry: the business and economic environment still gives the company time to turn things around.
I like Adami’s points. However, the title “how to catch a falling knife” is telling. Traders and investors should not actually reach out to catch a falling knife. Instead, they should step in when the risk of catching a knife is sufficiently low to make the risk worthwhile. In other words, I prefer to wait for “confirmation” that the falling knife has finished falling; I want the ground to catch the knife, not me.
Two years ago, I described this confirmation process in a piece titled “Do Not Argue With Sellers – Celebrate With Buyers.” When sellers have firm control of a stock, I want to wait for a some sign of buying like a trading day with a gain. A stronger confirmation occurs after buyers manage to establish control of the trading with a complete reversal of the most concentrated part of the sell-off. My only rare exception to the confirmation rule occurs when I have a strong conviction from some data or analysis that puts me in accumulation mode.
In the case of GE above, a close above $11.80 would be the first potential sign of a washout and exhaustion of sellers. A close above $12.71 would signal high odds of a complete washout. Since I already have a position in play, I am content to wait for this more definitive confirmation. Shorter-term traders should stop out of their long positions if GE manages to close below the latest low of $11.27. If GE closes at fresh lows, then the first signal of seller’s exhaustion adjusts downward to whatever closing price clears the intraday high of the last day of high-volume selling.
GE will continue to capture the imagination given its iconic status as a symbol of America’s industrial past. Now we wonder whether the future is waiting for GE as it sinks in stark contrast to the strength of the American economy and the near relentless up-trend of the S&P 500 (SPY).
Be careful out there!
Full disclosure: long GE call options
Generalelectric
GE - Ideal Short Levels (An GE Just Gave Another Teaser!)This is a quick summary of this GE idea, but GE started its strong downtrend on May '17 and it started to slow down in May '18. That's 1 year with a ~52% loss, in other words a very strong downtrend or crash.
It was a discussion I was having with a fellow member and I decided to share it as an idea rather than keep it to myself just because of how interesting the story has been so far. GE just broke down another support level at $12.60 after failing to hold its recovery rally up to the $15 mark. Right now the support break tells us that the stock is still weak, but a confirmation is needed to initiate another sequence of shorts if the downtrend resumes. If GE holds below its $14 level and makes a correction to the downside, it would be the time to short for me (this is a separate idea from what I will be doing with the portfolio growth challenge). As short as I am on this stock, it is only a waiting game until a further sign of weakness appears.
Let's give GE till about December to make up its mind.
We will see how this plays out. There is no prediction here, only reaction to the price action on the charts. Credit to @pherrman for bringing up the discussion.
Very long very bearish GE market might be endingLooks like general electric is bottoming.
It's visiting a level that has been reactive in the past, the monthly RSI is at it's ath on the monthly (very slightly higher)
If that support gets reached with bullish divergence again (daily & weekly chart too), I think it won't be a bad idea to go long.
I am prepared.
It could also spike too fast and/or during pre-market so we all miss it rip.
GE - Ready to star an uptrend?GE has been in a downtrend path for all the 2017 and 2018, most of the time even under the moving average 50 days (blue line), and the price just once tested the 100 days trend line (orange moving average).
Today, the stock is closing almost with a +8%, after the company announced his plans to spin off its health-care business and sell its participation in the oil-services company Baker Hughes.
Maybe is too early to say the downtrend is finished, and the company still faces some risks in the short term, as some expected downgrades in his credit rating, and his recent reality after it was removed from the Dow Jones.
From the technical analysis view, there are some key elements: A) possible double bottom formation, around the $12.75 area, and B) a possible MACD bullish cross in the daily graph (left).
Before to go long, I will wait for some confirmation signals for the next days, such as: 1) keep price action over today GAP ($13.5); 2) price action over the moving average 8 days (green line); 3) golden cross between 20 and 50 days moving average; and lastly, but not least important 4) stay above the long-term trend, the 200 days moving average!
Second long: GEHere comes the second long. This is a more risky trade because there is still room for GE to move down. You may have heard that it was dropped from the Dow, recently. It is my assumption that GE is ready to move up because it has done so recently despite all the bad news, including moving up on negative earnings.
Entry: 13.05
TP1: 19.25
SL: 12.5
This is a 11:1 risk ratio trade. Do your own research before risking any money.
If you have less risk appetite, wait for the tenkan to go above the kinjun on the daily. I fell comfortable with it because of the slow stochastic and RSI.
PS: I see that the chart does not look exactly as I designed it. The fact is that the angle is 46 degrees like here:
General Electric, testing big support levelAfter testing 12.79 for two weeks and retracing to 38.2%, GE seems to continue its sell-off, which started back in January 2017.
Today, GE got kicked off the Dow Jones list and replaced by Waldgreens Boots Alliance, a drugstore chain. GE is the last company from the original list of the Dow, it was there for over a 100 years. This adds to the bearish sentiment.
A break below the support opens the lower target area at the next support at 10.67. Last time level was testes in the summer 2009.
A good entry would be below the support level with the buffer that suits your trading style. It is a long term trade.
Alternatively, the price could bounce up again, but I do not see bullish signs. RSI approaching oversold, but it could go as low as 20 as the chart shows.
Happy Trading!
GE Price targets and possible long term movementsFibonacci and formations worked very well.
On the monthly chart I also pointed to the returns from the Fibo supports and resistance.
17.73 (0.618) - Even if it turns, it can continue to move up
20.65 (0.5) - Important and equilibrium point
23.56 (0.382) - Most likely to return
The first target is 20.65 but 17.73 is important too. You can sell at here and after price up to resistence buy again. Eventually, this is a resistance
The overall trend is in decline.
Below, I draw two possible scenarios on the big chart. For the trend change, first the thick blue line must go up. Then 33 resistance.
It seems more likely to turn away from resistance and fall back.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
I'm sorry for the impaired expression..Just watch the chart, not what I write. :)
PS make sure you give me a like, If you like this analysis ....
Two long-term probable scenarios on the monthly chart
General_Electric_(NYSE:GE)_May_10_2018GE one of the finest companies representing Americal instrutrial prowess and technological marvel. However, in the last 52 weeks, the company's performance has be too poor to garner any positive mention. The bearish sentiment resulted primarily from GE Capital and GE Power. On the other hand, GE still has many crown jewels such as GE Aviation, GE HealthCare.
My analysis indicates, the worst may be over for GE and as long as the management avoids short sighted decisions (that may boost profit now but will hurt outlook later). I think in the near term the price is expected to climb towards the $15-18 range. Long term however, I see GE as a $25+ stock. Although, the dividend has been cut and the cash flow does not look great (along with an underfunded pension plan), GE does have the potential to climb back up into the SP500's top performers.
GE has always been an innovator. As long as that culture is imbued within the employees and managements takes steps to retain key employees, I see the outlook as very positive. The worst case scenario for GE would be another recession as the demand for industrial products can drop significantly leading to lower revenues. However, I think at this point, it is an excellent opportunity to buy into GE.
Market Review / May 2nd : BTCUSD, SPX, GE, GOLDHope this idea will inspire some of you !
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Kindly,
Phil
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GOD SAVE THE GENERAL ELECTRICGOD SAVE THE GENERAL ELECTRIC
This chart since 1968 it looks sad and hard to consider for any portfolio, but even depleted assets have value!
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Thoth Strategy - GE - 220% - 72% Profitabe - 01/01/18
Uses:
Linear Regression Divergence
Ichimoku Cloud
Zero Lag MACD
Zero Lag EMA , John E.
Hilbert Sine wave support and resistance
Features:
Date Selector
No Repaint
Alarms
Trading Version
"Thoth the Egyptian scientist, mathematician and engineer. In art, he was often depicted as a man with the head of an ibis bird"
Made in Qmt with 999ug.