4 Trade Ideas for General Electric: Bonus Idea

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

General Electric, $GE, comes into the week rising back towards resistance after finding support at the 20 day SMA. This has been a pattern that has held since it started higher at the end of December. The RSI is rising again in the bullish zone but starting to show a divergence with the price action. The MACD is positive but also with a slight negative divergence. But price pays, not momentum.

There is resistance at 104.50 and then a gap from 106.21 to 107.77 and again from 111.07 to 112.24 from January 2018 followed by 115.50 and 120 then 123. Support lower is at 102 and 100.75 then 98.75 and 96.25. Short interest is low at 1.2%. The stock pays a dividend with an annual yield of 0.31% and has traded ex-dividend since March 6th. The company is expected to report earnings next on July 24th.

The June options chain shows the biggest open interest at the 100, 95 and 90 strikes on the put side. On the call side it builds also every $5 from 90 to a peak at 100 then tails to 115. The July chain has biggest open interest at the 90 put and much bigger at the 110 and 105 call strikes. The September chain is the first to cover the next earnings report and shows strong open interest from 105 to 90 on the put side but even bigger building from 90 to a peak at 105 then large again at 120 on the call side.

General Electric, Ticker: $GE

Trade Idea 1: Buy the stock on a move over 104.50 with a stop at 100.50.

Trade Idea 2: Buy the stock on a move over 104.50 and add a June 100/95 Put Spread ($1.10) while selling the July 115 Call (80 cents).

Trade Idea 3: Buy the June/July 110 Call Calendar ($1.47) while selling the July 90 Put ($1.05).

Trade Idea 4: Buy the September 90/105/115 Call Spread Risk Reversal ($1.69).

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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 Memorial Day Weekend and the start of summer trading, equity markets were mixed with Tech and Large Caps showing strength while Small Caps languished sideways.

Elsewhere look for Gold to continue its pullback in the uptrend while Crude Oil consolidates in a broad range. The US Dollar Index continues to drift to the upside while US Treasuries pullback in consolidation. The Shanghai Composite looks to continue a short term move lower while Emerging Markets consolidate.

The Volatility Index looks to remain low and stable making the path easier for equity markets to the upside. The charts of the SPY and QQQ look strong, especially on the longer timeframe. On the shorter timeframe the QQQ is strong as well with the SPY breaking out to join it. The IWM continues to be the problem child moving sideways for over 2 months now. 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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