Monday, June 5, 2017

GE General Electric Weekly Chart; H&S; 16-Month Low; Gap

General Electric is one of the key 17 stocks that have led the broad stock market higher over the last few years, however, a rolling top is printing over the last 1-1/2 year and price now prints lower lows and lower highs on a weekly basis. Isn't it interesting that virtual fantasy-world and social internet stocks such as AAPL, FB, GOOGL and NFLX explode higher printing record highs but GE, a company based in solid tangible goods and services that impact daily physical lives, is sick.

General Electric gapped higher in October 2015 and has been on an island ever since above 25.00. Price will eventually come down to fill the gap, or, come down and collapse through the gap from 25 to 24 in a heartbeat creating an island reversal chart pattern.

The red rising wedge, overbot conditions and universal negative divergence made the top call easy last summer. Note the November 2016 US presidential election when Donald Trump defeats Hillary Clinton. Infrastructure spending, less regulation and lower taxes are expected so industrial stocks catapult higher, GE included, but it never made it back up to the July 2016 high. Price rolls over again.

The bright red line show price down at 27-ish at levels not seen since early 2016 about 16 months ago. So high-flying tech stocks that provide gadgets, software and the internet interface abilities are going parabolic in stock price while a company that makes machines, engines, medical equipment, oil and gas equipment and energy and power products sinks into the ooze.

You can draw a few different head and shoulders (H&S) patterns on the chart. The blue bars show a neckline at 28.5 and head at 32.0, a 3.5 difference so the lower target is 25.0 since the neckline has been ruptured. The 25.0 is the top of that gap from 2015 that is big enough to drive a truck through. The thin brown lines show a slanted H&S pattern with head at 32.0 about 4 points above the neckline so the price failure at 29.2-ish targets 25.2-ish the same area. Price would be expected to back kiss the neckline at 28.5 at some point forward.

The MACD line is weak and bleak so after a bounce, due to the positive divergence with other indicators and oversold stoch's and RSI, price will likely make another low, on this weekly basis, perhaps testing the 200-week MA at 26.22. President Trump is expected to tout his infrastructure program this week so GE may experience some lift from that talk. It is important that a major industrial stock is rolling over lower while Americans are busy living in a virtual fantasy world with their heads buried in smartphones (pumping Apple, Facebook, Google and Netflix stock higher). This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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