Thursday, 6 July 2017

GE - its a problem

Whilst the main market settled broadly lower, there was very significant downside in General Electric (GE), which settled -3.8% at $26.31. The sustained price action under the $27.00 threshold is a serious problem for the industrial bulls, but arguably... also for the main equity market.

GE, daily

GE, monthly


GE saw a very mixed June, rallying on news that CEO Immelt was planning to step down, but those gains quickly faded, and the stock closed net lower for a fourth consecutive month.

Today's price action is merely cementing the serious technical problem that should be clear via the giant monthly chart. We have a sustained break under rising trend/support that began in March 2009. Such a break can't be dismissed lightly, even as the main market remains close to historic highs.


... the downgrade by JPM to $22 sure didn't help today.

I will end by noting, near term is clearly bearish, but ongoing price action is especially weighed down by the long term bearish break.

To many, GE is a boring stock... but even if you never trade it, GE is important to track, and consider in any assessment of the broader equity market.