Why General Electric Looks Good (Explained In 2 Charts)

In its most recent Dow 30 report Eagle Bay’s founder and Market Technician JC Parets provides a few comments regarding General Electric Company GE.

Weekly Chart

As shown in the chart above, structurally, GE could break out in April, above the superior of the converging trendlines, which have defined a symmetrical triangle since 2013. Concurrently, relative strength could also surpass a downtrend line from late 2013.

Parets and his team see both these developments as encouraging.

Momentum continued to be in a bullish range, and did not hit oversold territory on the recent correction. This is yet another good signal.

“With a rising 200 week moving average we said that a positive development would be a breakout above the downtrend line from the 2013 highs and I would be a buyer of that all day,” Eagle Bay analysts explain. “We got that and still only want to remain long if price is above this downtrend line. Our upside target is just under 31 based on the 161.8% Fibonacci extension of the 2014 correction.”

Check out the daily chart below for a more tactical perspective.

Daily Chart

The short-term picture is somewhat different. A big development took place recently: Prices could finally break out above the upper of the converging trendlines, and Eagle Bay said they wanted to be buyers only above it.

“We now only want to stay long above that downtrend line, and happy to be neutral if we fall back below it. The next upside target is just above 29 based on the 161.8% Fibonacci extension of the November-January rally. Momentum is now confirming this bullish range and the 200 day moving average has turned up. All good things,” Parets concluded.