Don't Ignore This Chart

General Electric (GE) Tries To Change The Trend

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General Electric (GE) is base building as we roll into May. The plummeting stock has stopped its free-fall and has now built a small head shoulders setup. Head and shoulders refers to a changing trend. The momentum is improving on each low and the stock starts to make higher lows which shows up as two shoulders around the low.

The SCTR still is very low. The Relative Strength is very close to 3-month highs which is usually a good scan to run on stocks. It will take a while to work the SCTR higher and it is a long way to the 200 DMA at $18.58. One of the main components of the SCTR is the position relative to the 200 DMA.

What I like is the improving momentum (MACD) is just starting to make a positive touch on the signal line while above zero. You can click on the chart and add some years to see the last time that happened. Yesterday's volume on a down day was the lowest on the chart shown. Lack of sellers? 

With a 3.3% yield (Updated), this might have some horsepower to the upside. A stop below Friday's low should be a good place to protect against further downside.

Good trading,
Greg Schnell, CMT, MFTA

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Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com specializing in intermarket and commodities analysis. Based in Calgary, he is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is also the author of Stock Charts for Dummies (Wiley, 2018). Learn More
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