4 Trade Ideas for General Electric: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

General Electric, GE, rose off of a December low following a multi-year decline. The rise ended as it hit the 200 day SMA in February. Since then it has moved sideways under horizontal resistance. Coming into the week it is at the top of the resistance zone and over the 200 day SMA. It has a RSI just into the bullish zone with the MACD rising and positive. The Bollinger Bands® are flat.

There is resistance at 10.50 and a move over that triggers a target to 13.75. Above 10.50 resistance is at 10.90 and 11.15 then 11.55 and 12.30 before 13.25 then 13.70 and 15. Support lower comes at 10 and 9.50 then 9. Short interest is low at 1.2%. The stock pays a dividend that yield just 0.39% and it started trading ex-dividend last March 8th. The company is expected to report earnings next on the morning of July 18th.

The June options chain shows the largest open interest at the 10 and 9 strike puts. It is also very large at the 10 and 11 strike calls. July options, covering the earnings report, have largest open interest at 11 strike call then the 10 calls. The 10 puts are not far behind that. In August the open interest is biggest at the 11 and 12 strike calls, then the 8 puts.

General Electric, Ticker: $GE

Trade Idea 1: Buy the stock on a move over 10.50 with a stop at 10.

Trade Idea 2: Buy the stock on a move over 10.50 and add a July 10/9 Put Spread (27 cents) while selling the August 12 Call (13 cents).

Trade Idea 3: Buy the July 5 Expiry/July 11 Call Calendar (10 cents).

Trade Idea 4: Buy the August 9/11 bullish Risk Reversal (15 cents).

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After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into June options expiration saw equity markets took a digestive breather after a strong move higher, but remain looking healthy on the longer timeframe.

Elsewhere look for Gold to continue in its uptrend while Crude Oil continues to move lower. The US Dollar Index is now in a short term downtrend while US Treasuries continue to be biased higher. The Shanghai Composite and Emerging Markets are pulling back lower. Volatility looks to remain low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts show a loss of power and momentum in the short run but continued strength in the longer timeframe. Use this information as you prepare for the coming week and trad’em well.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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