Not all of the setups we're looking at today are bullish. Right now
) is looking anemic in the short term. GE is currently forming a rounding top, a pattern that looks just like it sounds. The rounding top indicates a shift in control of shares from buyers to sellers, and it triggers a sell (or short) signal on a move through the $26.50 breakdown level.
The setup in GE is relatively small, and that means that the trading implications to the downside are relatively contained too -- but that also means that GE is likely to be a serial underperformer during December, a month when it makes sense to take advantage of better relative strength.
The uptrend break in RSI on the upper chart just adds some fuel to the fire for GE. Shares had been overbought coming into the rounding top pattern, and if shares can't catch a bid any longer at $26.50, expect a pretty quick move lower.
To see this week's trades in action, check out this week's
Must-See Charts portfolio
-- Written by Jonas Elmerraji in Baltimore.
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