In my December 22 review of General Electric ( GE) I doubted the strength in the stock because volume did not confirm the move. GE, nevertheless, rallied strongly. The Point and Figure charts pointed to price targets of $112 and $123 and the shares have so far stopped short of those areas.
Let's review the condition of the charts again.
In the daily bar chart of GE, below, I see that the shares have nearly doubled from their lows in July and October. The stock trades above the rising 50-day moving average line and above the bullish 200-day line.
Trading volume has improved since December and the On-Balance-Volume (OBV) line shows a rise from July. The 12-day price momentum study shows a lower high from January to March. This is a bearish divergence when compared to the price action.
In this weekly Japanese candlestick chart of GE, below, I see a mixed picture. Share prices have indeed rallied but notice the upper shadows on the recent candles. The stock has reached an area or level where traders are rejecting the highs.
The OBV line has improved since October. The MACD oscillator is above the zero line but has begun to narrow.
In this daily Point and Figure chart of GE, below, I can see that the software is projecting a downside price target in the $82 area.
In this weekly Point and Figure chart of GE, below, I can see an upside price target in the $95 area. Not all that far from here.
Bottom-line strategy: I don't want to sound like the Boy Who Cried Wolf, but GE looks like it can correct to the downside. Trade accordingly.
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The technical signals of the iconic food company seem lukewarm at best.
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