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Oppenheimer Technical Analyst On GE: 'Stay Away'

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Oppenheimer Technical Analyst On GE: 'Stay Away'

The multiyear chart for General Electric Company (NYSE: GE) shows sustained selling pressure since late 2016 with "no relief in sight," according to Oppenheimer's Ari Wald.

The Analyst

Wald, head of technical analysis at Oppenheimer, and Gina Sanchez, CEO of Chantico Global, talked General Electric stock during a CNBC "Trading Nation" segment.

The Thesis

GE's stock dipped below the $12 per share mark Monday and hasn't traded this low since mid-2009. With the stock lower by 33 percent since the start of 2018 on top of a 45-percent loss in 2017, shares are in a "very clearly defined falling channel," Wald told CNBC.

The research firm continues to hold a bearish stance on the stock with "no reason to take it off," he said. 

Looking forward, GE's stock could test the $8.50 level, which represents 2009's low, Wald said. This would imply another drop of nearly 30 percent from today's levels, which is "really amazing to talk about" considering the S&P 500 index is up around 300 percent since 2009, he said. 

"Talk about underperformance," Wald said. "Stay away."

Sanchez: Too Many Known Negatives

GE's stock comes with many "known negatives," Sanchez said. They include the following, the Chantico Global CEO said:

  • Unfunded pension liabilities.
  • Cash flow concerns.
  • Ongoing losses at the legacy insurance business.
  • Most recently, the disclosure of problems with its turbine blades.

GE does have several positive attributes, including a strong aviation business and strong dividend, she said. But the negatives outweigh the positives and the stock is "trading at option value" right now, Sanchez said. 

Price Action

GE shares were down 1.62 percent at $11.54 off the open Tuesday.

Related Links:

Sell-Side Analysts Respond To GE's Earnings Sell-Off

A Gas Turbine Issue Turns A General Electric Bear Even Grizzlier

Posted-In: Ari Wald Chantico Global CNBC Gina Sanchez Oppenheimer technical analysis Trading NationMedia Best of Benzinga

 

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