4 Trade Ideas for General Electric: Bonus Idea

• Posted by Greg Harmon
• on January 6th, 2020

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

General Electric, $GE, bottomed after a horrid couple of years in December 2018. It ran higher from there to the 200 day SMA and stalled in February. It held there for 5 months until dropping again, this time to a higher low. Since that September low it has moved up again and consolidated at a higher base until last week. That is when it broke to the upside over the consolidation. This gives a target on a Measured Move to 14.

The RSI is rising in the bullish zone with the MACD crossing back up and positive. The Bollinger Bands® are also opening to allow a move. There is resistance at 12.30 and 13.20 then 13.70 and 14.75 before 15.35 and 16.65. Support lower comes at 11.70 and 10.80. Short interest is low at 1.1%. The stock pays a small dividend with a yield of 0.33% and started trading ex-dividend on December 20th. The company is expected to report earnings next on January 29th.

The January options chain shows very high open interest at the 9 and 10 put strikes as well as the 12 call. The January 31 Expiry, covering the earnings report, has big open interest on the put side from 10 to 11, but much bigger at the 12 call. February open interest is biggest at the 11 put and the 12 call. March options have very high open interest from 8 to 11 on the put side and 10 to 15 on the call side.

General Electric, Ticker: $GE

Trade Idea 1: Buy the stock on a move over 12 with a stop at 11.50.

Trade Idea 2: Buy the stock on a move over 12 and add a January 31 Expiry 11.50 Put (31 cents) while selling the February 13 Call (24 cents).

Trade Idea 3: Buy the March 12/January 24 Expiry 12.50 Call Diagonal (60 cents).

Trade Idea 4: Buy the February 10/13 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 that saw with the decade ended and now a new one begun, that equity markets looked extended.

Elsewhere look for Gold to continue higher while Crude Oil moves to the upside. The US Dollar Index continues to look better to move lower while US Treasuries pause in their downtrend. The Shanghai Composite looks poised to continue higher along with Emerging Markets which are breaking above long term resistance.

The Volatility Index looks to remain low making the path easier for equity markets to the upside. Their charts look strong on the longer timeframe, but are starting to get extended. On the shorter timeframe the IWM is retracing while the SPY looks like it might pause with the QQQ continuing to race higher but the most extended. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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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