General Electric Stock Holds Critical Support, Looks Set To Bounce

General Electric Co GE announced on Thursday it had successfully demonstrated the feasibility of its giant earthworm tunneling robot.

The $2.5-million project, funded by the Defense Advanced Research Projects Agency’s (DARPA) Underminer program, allowed General Electric to create a soft, fluid and dexterous autonomous prototype able to maneuver around obstacles underground.

The robot is able to tunnel at a distance comparable to commercially available trenchless technologies. Due to its soft, jointless design, General Electric’s earthworm can navigate extreme turning radiuses, operate in confined spaces and can pick up and move objects of many shapes and designs.

The news may have helped General Electric’s stock avoid closing below an important support level on a day where the general markets had investors feeling shaky. Now the stock could be set for a bounce higher.

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The General Electric Chart: General Electric has been trading sideways between $12.23 and $14.42 since Feb. 22. The stock has not closed below the $12.72 mark since March 24, which makes the level critical as support.

On Thursday, amid general market weakness, General Electric’s stock briefly dropped below the critical level but closed the day above it. This demonstrates both the strength of the level as support and the strength of the stock overall.

The long lower shadow on Thursday’s candlestick also demonstrates that any time the price fell below support, bulls bought the dip.

General Electric is trading below both the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day EMA, both which are bearish indicators. The stock is also trading below the 200-day simple moving average, which indicates overall sentiment in the stock is bearish. General Electric’s stock has been hugging the moving averages for months, however, and because it is within only 2.6% of regaining the indicators as support, it easily could. 

Bulls want to see Thursday’s candlestick mark a reversal back to the upside and for bullish momentum to pop General Electric’s stock up over all three moving averages. If it can regain the levels as support, it has room to move up toward $13.58.

Bears want to see big bearish volume come in and drop General Electric under the critical support level of $12.72. If the stock were to lose that level as support, it could fall toward $12.23 before potentially bouncing.

GE Price Action: Shares of General Electric shares were trading 2.06% higher at $13.14 at last check Friday.