General Electric (GE) has been strongly correlated to the S&P 500 index as it has moved above a two year uptrend line that tracked along with its 200 day moving average. In July, it broke that trend line and the 200 day average, but formed a large hammer reversal candle later in the month, and this week recaptured its former support.
Unfortunately, the price action this week formed a three day eveningstar reversal pattern. It consists of a large white candle that reflects optimism, a small opening and closing range doji candle, in this case a gravestone doji, which reflects indecision, and finally, a large dark candle, suggesting pessimism. It is a transitional formation, more reliable after prolonged advances or at key areas of support.
Like any candle formation the eveningstar will require confirmation, which will come in the form of another breakdown, and would be a negative sign for the stock and potentially the broader market.