Reader Request: General Electric Chart

By | August 31, 2014

30. RVT GE chart

On August 23rd, I highlighted the eveningstar formation on the General Electric (GE) daily chart. Since then, the stock price has broken a two year uptrend line, but has been holding right around the confluence of its 50 and 200 day moving averages. The relative strength index, MacD, and Chaikin money flow are sitting on their centerlines. A series of small range spinning tops and one large dark candle formed over the last week, and they are not encouraging candles.
It looks like GE is preparing to breakdown and a retest of the August lows could follow, but as I noted in the previous post, it is strongly correlated to the S&P 500, and continued strength in the index would have a positive effect on the stock.
That being said, General Electric at or near its current level is a good risk/reward short candidate, with a nearby buy-to-cover stop above the eveningstar pattern.

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