Dividend Stock Advisor holding General Electric (GE) has been in the Dow Jones Industrial Average since 1896 -- one of the original members picked by Charles Henry Dow.
Over the decades it has brought good things to life and at times to portfolios. GE declined sharply in the 2008-09 bear market and has been struggling to reshape the company and pump up its stock price.
GE has rallied recently, and the charts may reveal what is in store for this security.
In this chart of GE, above, we can see that prices are now at the top of its range. The On-Balance-Volume (OBV) line has been slowly climbing all year. Notice the small bullish divergence in August/September not long before GE gapped to the upside earlier this month.
In this longer-term view of GE, above, we can see the 2008 bear market and the slow recovery from the 2009 low.
GE has retraced a little more than 50% of the bear market's destruction, but it has taken years. Now that GE is at the top of its six-month range, it is overbought looking at the slow stochastic indicator in the bottom panel.
If GE breaks out to a new high for the move up at $29 when prices are overbought, it will be more impressive. A market that moves higher when it is considered overbought is a strong market!
In this point and figure chart above, we can see the price reversals in the stock ignoring volume and time. The next entry for GE on this kind of chart is $29. A breakout at $29 should generate further gains to the mid-$30s. Traders should risk to $26.50.