Can the Doji on the General Electric Chart Give us a Reversal?

 | Sep 11, 2017 | 3:01 PM EDT
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General Electric (GE) has been probing the area below $24 or where I anticipated support in a recent update, when we also said, "Maybe the weak longs have wrung their hands enough or sold out near the lows -- fingers crossed that GE can rebound a bit in the coming days." Looking an updated Japanese candlestick chart GE, below, we may have a glimmer of light for a turnaround.

In this daily Japanese candlestick chart of GE, below, we see two things that suggest a low. There is a lower shadow on the candle pattern from last Friday suggesting a rejection of the lows and today's pattern could be a doji which would be a balance between bulls and bears. With a doji the open and the close of trading are the same or nearly the same so that the real body is closed to just a horizontal line or dash. This chart also shows that momentum has been improving the past two months. The 12-day momentum study lows have been higher and higher as prices have gone lower and lower - a bullish divergence.

For a successful candlestick reversal you need three things. First there must be a trend to reverse and certainly GE has been in a downtrend. Second the pattern needs to be right. In this case it looks like a doji and last you need to have bullish confirmation tomorrow. We may be two-thirds of the way there. Let's see what develops tomorrow with GE.

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