General Electric Stock Forms This Continuation Pattern: What's Next?

On Thursday, General Electric Company (NYSE: GE) announced a partnership to develop its Advance Casting Cell 3D printer with financial support from the German Federal Ministry for Economic Affairs and Energy.

The printer will help GE greatly reduce the production time for components used in its GE's Haliade-X offshore wind turbines.

When GE completed its 1-for-8 reverse stock split on Aug. 2 its float was lowered eightfold. The stock still has a large 1.09 billion share float, but 65.54% of the available shares are held by institutions — meaning there are about 375.61 million shares available for trading.

See Also: How to Buy GE Stock + Pros, Cons & Outlook for 2021

The GE Chart: GE’s stock reached a May 27 high of $115.20 before falling into a downtrend, making lower highs and lower lows on the daily chart. The stock then reached a bottom near the $94 level on July 19 and reversed course up to the $108 area.

GE’s stock has settled into a tightening range and formed a pennant pattern, making lower highs but higher lows. GE is set to meet the apex of the triangle on Oct. 26 and should break from the pennant before the date. A pennant is a continuation pattern and because GE was trading higher before settling into the formation it is most likely GE will break bullishly from the pennant.

GE is trading slightly below the eight-day and 21-day exponential moving averages (EMAs) with the eight-day EMA trending below the 21-day, both of which are bearish indicators. GE’s stock is also trading slightly below the 200-day simple moving average indicating the bulls and bearish are fighting to control the overall sentiment.

• Bulls want to see big bullish volume drive GE’s stock up through the upper descending trendline of the pennant and through a resistance level near $106. If the stock can regain the level as support it has room to rise up toward the $110.64 mark.
• Bears want to see big bearish volume drop GE down below the lower ascending trendline of the pennant. If the stock loses the area as support it could fall toward the $95 level.

Photo by Marek Piwnicki on Unsplash