GE Aerospace (GE)

[MiamiGent]

GE GE’s stock snaps out of its 15-year slump

Published: Apr 10, 2015 4:08 p.m. ET
By Tomi Kilgore
Marketwatch Reporter

http://stockcharts.com/h-sc/ui?s=GE

(chart- entire article found at bottom this page)
GE breaks out from 16-month downward channel, and above a 15-year downtrend line


NEW YORK (MarketWatch) -- General Electric Co. hit a home run for investors.

While market pundits debate the virtues of General Electric’s announcement Friday to exit the banking business and return a boatload of money to shareholders, a chart shows a pretty clear picture of what it has done for the stock. One doesn’t have to be a seasoned technical analyst to see that the stock has emphatically broken out from the downtrend it has suffered through for the last 15 years.

GE’s stock GE, +10.80% soared 11% Friday to close at the highest level since Sept. 8, 2008. Volume, which technicians view as a validator of a stocks rally -- the more the better -- was 351.1 million shares, or 10 times the full-day average, according to FactSet.

“This is very good in the bigger scheme of things, for the company and the stock,” said Mark Newton, partner and chief technical analyst at Greywolf Execution Partners. “It’s nice to see fundamentals and technicals both support this nice move.”

Even on a shorter-term basis, the chart looks pretty bullish, as the stock has broken out from the downward sloping channel it has been following the last 16 months.

(chart)
GE changes the channel pattern to bullish

While the stock could see some minor weakness in the near term after such a big rally on Friday, Newton believes that would just provide a better buying opportunity.

“For now, a structurally significant move out of GE today, and for those who hold [the stock], it looks premature to sell, and would use any weakness down under $27 to $26.50 to buy,” Newton said.

His intermediate-term target for the stock is around $33, which is 16% above Friday’s closing price. That level represents the half-way-back point of the stock’s decline from its all-time intraday high of $60.50 reached on Aug. 28, 2000 and its Great Recession low of $5.73 hit on March 4, 2009.

The next retracement target, based on the Fibonacci, or golden ratio, of 0.618, would take GE up to about $40, or 40% above current levels. Read more about the Fibonacci ratio.

http://www.marketwatch.com/story/ges-stock-snaps-out-of-its-15-year-slump-2015-04-10