At one point this year, the General Electric stock (NYSE: GE) was down around 50% from the year’s opening price, at 11.23. Now the stock managed to recover somewhat, however it is still down for the year. GE suffered a major blow in the end of February, together with the rest of the market, when it declined heavily due to the coronavirus pandemic. If we look at the company’s business segment breakdown, we will see that the main free cash flow is coming from the aviation segment of the company. As we already know, the aviation industry had suffered a strong hit during the global lockdown, which forced new investors to temporarily shift away from the GE stock.
But after bottoming in mid-May near the 5.48 level, the share price started climbing higher again. Looking at the technical picture right now, although the stock has been seen sliding during the past few trading sessions, GE still remains above its short-term upside support line taken from the low of May 15th. As long as that line stays intact, we will continue looking north.
A small further decline could bring the share price closer to the 7.42 zone, marked by the highest point of May, or it may end up testing the aforementioned upside line. If one of those lines does eventually provide a decent hold-up from where the stock might rebound, then we could see another uprise, possibly leading to areas seen in the beginning of this week. That’s when we will aim for the 7.83 obstacle, a break of which could send the price to the 8.20 hurdle, or the 8.56 level, marked by the highs of June 9th and 8th respectively. If those barriers are not enough for the buyers, a further acceleration may bring GE to the 8.84 zone, or the 9.18 level, marked by the high of March 10th and the low of March 6th respectively.
Looking at our oscillators, the RSI and the MACD, both seem to be pointing slightly to the downside. However, the RSI is still moving around 50 and the MACD, despite being slightly below its trigger line, still remains above zero. Both indicators are somewhat in support of the above-discussed scenario, as they are not yet showing clear signs of negative momentum.
Alternatively, if the previously-discussed upside line breaks and the share price slides below the 7.17 hurdle, marked by the high of June 2nd and the low of June 4th, this might temporarily keep new investors from entering any time soon. The stock could then travel to the 6.81 obstacle, a break of which may set the stage for test of the 6.46 level, marked by the low of May 29th. Slightly below it lies another possible area for test, at 6.09, marked by the low of May 19th.
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
There are risks involved with trading of cash equities. Past performance is not indicative of future results. You should consider whether you can tolerate such losses before trading. Please read the full Risk Disclosure.
Copyright 2020 JFD Group Ltd.