The technical condition of General Electric (GE) has continued to improve since our mid-April update, when I looked at things this way -- "We don't have a chart of the short interest on GE but it has been reduced four million shares from 155 million to 151 million shares, recently. As a stock declines there is less reason to be short. Add in a bullish divergence from momentum and reduced volume and a point and figure target and we have enough ingredients to have a low." In the past few weeks the charts and indicators for GE have improved. Let's take a look.
In this updated daily bar chart of GE, below, we can see that prices have been able to rally above the now flat 50-day average line. This is an improvement because the line was bearish for months and months. The 200-day moving average line is still bearish but we will take things one at a time. Now look at the daily On-Balance-Volume (OBV) line which began to turn up from late March. Finally, buyers of GE have turned more aggressive. The Moving Average Convergence Divergence (MACD) crossed above the zero line in late April for an outright go long signal. The oscillator has corrected recently but could soon turn up again.
In this weekly bar chart of GE, below, we have mixed signals. Mixed is better than everything being bearish. Prices are still below the declining 40-week moving average line. The weekly OBV line looks like it is trying to stabilize while the MACD oscillator on this time frame continues to improve after its early April cover shorts buy signal.
In this Point and Figure chart of GE, below, we are still in a downtrend but we can see that a trade at $16 will improve the picture.
Bottom line: It will be a long recovery process for GE but things have started to improve. Another move to the upside and a close above $16 will improve things a bit.