Additionally, shares have been able to reclaim a few key technical areas, but have failed at others. It leaves investors cautiously optimistic that perhaps the worst is over for General Electric at this point and gives hope to a higher stock.
The company delivered a top- and bottom-line beat for the third quarter, while also raising its free cash flow guidance. Readers will recall that free cash flow has been a key concern among investors and analysts alike, so easing those fears is a catalyst for the bulls.
The stock must hold its post-earnings gains -- which may be hard if the market gets bumpy -- but it will be a key development going into year end.
Let's look at the charts and see what's going on.
Trading GE Stock
In August, General Electric stock broke down below $9, which has been range support for almost all of 2019. Shares then promptly broke below $8, with buyers ultimately stepping in to defend the stock at $7.75 multiple times over the next several sessions.
It's taken several months to claw its way back, but GE stock has been able to put in a series of higher lows and reclaim $9. In doing so, it also reclaimed the 50-day moving average and downtrend resistance (purple line).
Holding up just over $9 for the last few weeks eventually yielded a bullish response, as shares reclaimed the 100-day and 200-day moving averages, as well as the 61.8% retracement with Wednesday's rally. This area comes into play between $9.40 and $9.50, in what has turned into a must-hold level, in my view. If the stock gets hit, this area has to hold, otherwise $9 and potentially lower could be back on the table.
On the upside, GE was not able to maintain above the 78.6% retracement at $10.25. If it can reclaim this mark in the ensuing sessions, the stock's resistance zone between $10.50 and $10.75 is on the table.
Admittedly, this is an intimidating zone. However, if GE stock can reclaim this area, there's very little that stands in its way from marching back to its 52-week highs up near $11.25. That's up more than 12% from current levels.
The bottom line: Above the 200-day moving average is constructive, while below $9.40 is bearish. Over $10.25 and the $10.50 to $10.75 are is possible. Above this range is bullish for GE stock.
Save 57% during our Halloween Sale.
Don't let this market haunt you and join Jim Cramer's Investment Club, Action Alerts PLUS.
This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.