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PreMarket Prep Stock Of The Day: General Electric

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PreMarket Prep Stock Of The Day: General Electric

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

Even if one had a company’s earnings report ahead of the release, it still may be hard to predict the price action of the issue in the upcoming session. With that being said, General Electric (NYSE: GE) is the PreMarket Prep Stock Of the Day.

Underperformer In 2020: After ending 2019 at $11.26, GE followed the S&P 500 index higher, reaching $13.26 in February before retreating to end the month at $10.88. It cratered with the broad market in March, falling to $5.90, and attempted to rebound.

Whereas the index bottomed in March, GE undercut its Mach low by declining to $5.49 in May. That low coincided almost to the penny with its March 2009 low of $5.51. The index sharply rebounded from its March low to end the year with a 15% gain, while GE ended the year slightly in the red ($11.18 versus $10.80).

It should be noted that a vast majority of the gains off the low came in November ($7.42 to $10.18).

Off To A Good Start In 2021: The issue has moved in sync with the index in 2021. Both bottomed on the first trading day of the year, which for GE was $10.40, and began to rally. At the time of the writing of this article, the S&P 500 index is higher by 2.7%, with GE being higher by nearly 5.5% ($10.80 vs, $11.40).

Wall Street Cautious Ahead Of Earnings: GE ended Monday’s session ($10.99) well off its yearly high from Jan. 12 ($11.91), which was the same day of its closing high price for the year ($11.78). In fact, in Monday’s sell-off it matched its year-end price ($10.80) when bottomed at $10.77.

Mixed Q4 Report: Before the open, the company announced a mixed fourth-quarter earnings report. While beating on the top line for sales ($21.93 billion versus the $21.83 billion estimate), the company missed on the bottom line by a penny. The bright spot in the report was power orders of $5.6 billion, which was up 26%.

PreMarket Prep Take On PreMarket Price Action: Off the print, investors choose to emphasize the sales beat. The issue immediately began to rally in almost a straight-up manner. Ahead of the opening bell, the issue peaked at $12.15 and managed to open just above the yearly high ($11.91) and $12 psychological resistance level.

When the issue was being discussed it was trading actively at the $12 area. Investors were cautioned that if the issue opened above $12 and was unable to sustain that level, the issue may surrender some of its gains.

The full discussion on the issue from today’s show can be found here:

Price Action During The Regular Session: GE buyers were able to satisfy all the sellers in the lower $12 area and the stock was able to breach the premarket high ($12.15), reaching $12.23, and then sharply reversed course.

It continued to make new lows for the session, with the current being $11.25 as of 1 p.m. ET.

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Photo credit: Momoneymoproblemz, via Wikimedia Commons

 

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