GE Aerospace (GE)

[vicorka]

Over the past couple of days we has strong increase in trading volume on the DJI index. See the DJI index chart (chart #1) below. On the DJI index such strong increase in trading volume could be compared to the bottom of the correction we saw in August 2015. At that time, the strong bearish volume surge marked the bottom of the correction. Now we have equally strong bullish volume which could be a sign of a coming reversal down in the near future.

Chart #1: DJI Volume chart


The interesting sign is that we do not see such strong increase in volume on other market indexes. By checking the most traded stocks on the DJI index you will see that the highest volume has been around GE stock - see the chart #2 below. As a rule we usually may see strong increase in volume during a strong price change, when stock or index suddenly drops or strongly moves up and a lot of stop-loss orders are triggered. However, in the current case with the GE stock, we have strong increase in volume during the side-way range trading. Because of that, it is difficult to say whether there are the Bulls or the Bears are the main force behind this volume

Chart #2: GE stock chart

charts from www.marketvolume.com
By going into the higher time-frames and by checking the 10-year the GE stock chart, we actually may say that the current increase in volume on the GE stock could be compared to the GE volume seen during the crash in 2008. It pushes me believe that this is volume is not caused by short-term day traders, not even by mid-term players. Most likely this volume is caused by the long-term traders, possibly institutional long-term investors. If this volume is caused by the institutional long-term traders who was buying back in 2009 then I would say id could be serious sign that they started to dump the GE stock and there is the possibility soon we will have this stock crushed down.