The American multinational conglomerate that operates through the segments, aviation, healthcare, power, renewable energy, digital industry, additive manufacturing, and venture capital and finance, General Electric Company (NYSE: GE) seems poised for a price surge according to its latest charts.
Bullish Indications
#1 Symmetrical Triangle Pattern Breakout: As seen in the daily chart, a symmetrical triangle pattern was formed during the past few months. This pattern, shown in purple color lines, represents a period of consolidation before the price breaks out. A symmetrical triangle pattern is typically formed when there is an indecision in the price movements and uncertainty among the buyers and sellers. Once a breakout from the upper trend line of the pattern occurs, it usually signifies the start of a new bullish trend. Currently, the stock has broken out of the symmetrical triangle pattern, indicating bullishness.
Daily Chart – GE
#2 Above MAs: The stock price is currently above both 50-day as well as 200-day SMA. This is a possible bullish sign.
#3 Bullish ADX and DI: The ADX indicator shows bullishness because (+DI) is greater than (-DI), and ADX has started to move higher from below both (+DI) and (-DI) lines.
#4 MACD above Signal Line: In the daily chart, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.
#5 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the daily chart. This indicates possible bullishness.
#6 Double Bottom Pattern Breakout: The weekly chart shows that the stock has broken out of a double bottom pattern. This is marked in pink color. The price is also currently above the 50-week as well as 200-week SMA, indicating bullishness.
Weekly Chart – GE
#7 Bullish Stoch: The %K line (blue color) of the stochastic is currently above the %D line (orange color), indicating possible bullishness.
#8 Bullish ADX and DI: The ADX line has currently moved up from below –DI and +DI lines in the weekly chart. The +DI and ADX lines are also currently above –DI line. This indicates possible bullishness.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy level for GE is above the price of $14.50.
TP: Our target prices are $18 and $22 in the next 4-6 months.
SL: To limit risk, place a stop loss at $12.50. Note that this stop loss is on a closing basis.
Our target potential upside is 24% to 52% in the next 4-6 months.
For a risk of $2.00, our target rewards are $3.50 and $7.50. This is a nearly 1:2 and 1:4 risk-reward trade.
In other words, this trade offers nearly 2x to 4x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the symmetrical triangle pattern. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.
Happy Trading!
— Tara
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