This time we are selecting a vastly different type of name.
There is a smooth path to higher prices for General Electric (GE) in 2020. While there is little to no chance the stock makes it back to 2017 levels without some catalyst, the stock has clearly made positive strides, moving in the upward direction.
It's going to take plenty of time, but after being put in "investors prison" last year, time is something GE and its patient investors have plenty of on their side.
The tale of this storied company is well known. Removal of the CEO, sale of assets, loss of important business to competitors.
Stories about valuation from analysts scared many investors away. The stock started circling the drain two years ago as big institutions fled the scene. But 2019 was a good transition year, and as we see from this weekly chart the green shoots are visible.
Earnings last quarter were solid and beat expectations, and that should be the case over the next couple of quarters.
Money flow has turned positive again and is quite strong. In fact the flow turned green in early 2019 and was pretty strong all year long.
Strikingly, GE was up about 50% for the year, putting it ahead of many of its competitors. Of course, that is coming off a low base but nevertheless a strong performance.
The 200-day weekly moving average hovers above, at about the $18 level. That might be a really nice target in 2020, a smooth ride up and a 70% gain to boot.
Notice the series of higher lows on the chart -- that is bullish. The cloud just turned green after spending many weeks in the red.
Moving Average Convergence Divergence (MACD) is on a strong buy signal too, which tells us the stock remains strong even with this modest pullback. The pennant created here is also bullish.
We like GE here for strong gains in 2020, perhaps a breakout into the next decade as well.