Saturday, July 8, 2017

GE General Electric Weekly Chart; Testing Long-Term 200-Week MA Support; Lower Band Violation; Oversold; Positive Divergence Developing; Gap

GE was one of the key stocks carrying the broad stock market higher over the last few years but you can see the rolling top in play the last 1-1/2 years as this key industrial stock gives up the ghost. Price is exactly on the 200-week MA support at 26.15-26.17 and the XLF must make a critical bounce or die decision next week. There is downward momentum.

Price violates the lower standard deviation band so the middle band at 28.64 is in play. The chart indicators are positively diverged (green lines) wanting to see a bounce in price sans the MACD line that is weak and bleak wanting another low in price after any bounce occurs in this weekly time frame. The brown lines show a gap from 2015 that is large enough to drive a truck through. Eventually, price will come down to fill that gap or print an island reversal pattern where price would come down to 25 and immediately collapse back down through the gap to 24 and lower.

The RSI and stochastics are coming off oversold levels which may help the General Electric bulls. Price is dropping into a falling wedge pattern another bullish indication. GE should bounce from here for a week or two, but that pesky MACD line should then take price back down again for a lower low say 2 or 3 weeks out. That is when GE should likely place a firm bottom and recover more substantively (when the MACD line goes possie d). 

The monthly chart is weak and has rolled over but price has violated its lower band and would be agreeable to a short term bounce that is hinted on the weekly chart above. There is nothing attractive to trade here with this GE piece of garbage. If you are nimble you can try a quickie long trade but stay nimble. Perhaps a couple weeks or so out, when price likely comes back down again and the MACD line turns possie d, then you can play a long but you do not even want to stay in that trade too long since the monthly chart remains nasty.

It is comical that industrial companies like GE, that build physical things to improve society, are shunned while the virtual world of technology, video games, shopping, social internet, all that trashy phoniness and unproductive stuff, is heralded as the second coming. HD is another hard goods company that was sold off last week but AMZN, AAPL, FB, NFLX, GOOGL run higher with traders tripping over each other buying at the ask. Do you live in a virtual world or the real world? 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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