In a segment on " Mad Money" Wednesday night, Jim Cramer gave a nod to General Electric (GE) . A little over five weeks ago, Cramer wagered that in the race to $10 a share, Ford Motor (F) would likely beat General Electric to the finish line. Turns out, GE pulled out a surprise win.
So how then did GE rocket to $10 a share? In a word, Boeing (BA) . With the 737 MAX now cleared to fly and a Covid-19 vaccine on the way, General Electric is set to surge along with the rest of the aerospace industry.
Let's pay a visit to GE's charts.
In this updated daily bar chart of GE, below, we can see that prices made an upside price gap earlier this month. GE is trading above a rising 50-day moving average line and above a still declining 200-day moving average line. Trading volume has been heavy for this widely held stock, but more importantly the On-Balance-Volume (OBV) line has been improving since September. GE's turnaround is happening in slow motion, so it is encouraging to see that some traders are becoming more aggressive buyers.
The trend-following Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in October for an outright go-long signal.
In this weekly bar chart of GE, below, we can see that prices and the indicators have improved in the past two months.
GE is trading above the declining 40-week moving average line. The weekly OBV line has improved the past three months, and the MACD oscillator is ready to cross above the zero-line for a buy signal.
In this daily Point and Figure chart of GE, below, we can see a potential upside price target of $11.66.
Bottom line strategy: The past eight months of trading on GE now appears as a bottom. Great, but can an eight-month base be enough to turn around such a huge company? I would anticipate that GE makes a bigger base with trading bounded by $12 on the upside and the $8 area on the downside.