GE General Electric Weekly Chart; CUP & Handle (C&H)

Keystone is hard-pressed to find any blue-chip stock that was an attractive long play this year. The monthly charts are topping-out painting an ugly picture ahead. GE is a potential long play for this year. The blue C&H jumps out at you although typically the handle is right next to the cup--sometimes you have to improvise as a chartist. The base of the cup is at 6.5 and the brim of the cup, where a breakout would be expected to occur, is at 10.5-ish, and lo and behold, that is where price breaks out.

Thus, adding the 4 difference to 10.5 is a 14.5 target and that level jives with resistance from 2018. Okay, so everything is groovy. Nope. GE broke up and out of the C&H so the 14.5 is officially in play but the red lines show negative divergence afoot. The stochastics are also overbot agreeable to a spankdown coming for GE. The MACD wants price to come back up again, after a pullback, for another higher high, on the weekly basis. Thus, GE will likely pullback for a week, then pop higher for the next week and then put in a top on the weekly basis.

This is the interesting part. The GE monthly chart is long and strong with the RSI, MACD, stochatics and money flow sloping higher. This tells you that it is highly likely that the 14.5 and perhaps higher numbers will print in the months ahead. GE has been crushed to a pulp. The mighty industrial was at 29 in 2017 and fell to a 6 handle; a -79% crash. Everyone has given up on GE no wonder it is basing and starting to recover.

On the weekly above, the ADX shows that the massive selling in 2017 and 2018 was a very strong trend lower. GE tried to stabilize in mid to late 2018 but that was when the light that you thought was at the end of the tunnel was actually the oncoming train. It took no prisoners with blood and guts flying everywhere, price was beaten from 13 to 6 in a heartbeat. There was carnage.

That is when the ADX started to show that down move as being a strong trend but no, it did not, the ADX reversed and fell lower, so the long-term bottom was likely in and it appears so now. The ADX is sloping higher currently and if it moves up into the high 20's and above 30 the bulls will be singin' songs and carryin' on since the move higher will be a strong trend higher. The Aroon green line is at one hundo with nowhere to go but down which is actually a drag on price in concert with the red neggie d lines on this weekly basis.

So if you are Jack Be Nimble trader, you go long on weakness over the next couple or few days and in a week or two or so, when you see the MACD line go neggie d on the next price high, you exit the long. Then sit back, it is not prudent to play the short side. GE will likely relax in price down to those moving averages and perhaps even the 10.5 breakout line, but this will all be a great buying opportunity. This weakness should last a week or few and then it will probably be off to the races higher for the remainder of the year. From February to the end of the year may be steady sideways and sideways up for GE perhaps with the stock market crumbling around it.

So if you are a very long term investor, you could buy some now, more in a month, more the month after and more the month after that and sit on that trade this year. Nimble traders can watch GE pull back for a day or few and buy that dip for the next high, but then sell that when the MACD line goes neggie d above, and sit back. Wait until the weekly chart comes back down and load up at 10-12 for a long-term hold. Keystone does not own GE. General Electric may be a good place to park money this year for those that have a lot of it and do not want to see it halved. 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.

Note Added Tuesday Morning, 1/14/20, at 8:16 AM EST: GE is at 12.12 this week and last week printing the highest numbers since October 2018.