Does that make for a good buying opportunity? For aggressive bulls, the stock is declining right into current support.
It’s always possible that this support level doesn’t hold, but for now it’s what we’re working with following a mixed quarter.
The company beat earnings estimates, missed on revenue and reiterated its full-year outlook.
Given the struggles we’ve seen from companies like Boeing (BA) - Get Report, it’s no surprise that GE didn’t have a more optimistic full-year outlook. However, improvements in the aviation space and the economy as a whole should be a tailwind for General Electric this year.
On the plus side, the company still expects full-year industrial free cash flow between $2.5 billion and $4.5 billion.
Even though the company generated free cash outflow of almost $850 million in the quarter, it was significantly better than expectations, which called for negative $1.5 billion.
Let’s look at what the charts say of GE stock’s latest decline.
Trading General Electric
In early trading, GE stock was breaking below the 50-day moving average. However, uptrend support (blue line) was there to buoy the stock.
Even though shares broke below the pre-coronavirus 2020 high, I like General Electric on a dip into this zone. With Tuesday’s bounce, traders have a level on the downside to measure against, giving them an attractive risk/reward.
If this level breaks, longs can cut their losses and look for a potentially deeper dip down to the $12.25 level. Not only has this level been significant so far this year, but the 21-week moving average comes into play nearby.
Back over its short-term moving averages and perhaps General Electric stock can give its current 52-week high a challenge, up near $14.40. Above that and $15-plus is possible.
The bottom line is pretty simple: The current dip in GE looks attractive, as shares bounce off several support measures.
Should those measures provide an adequate bounce, look for more upside. If it fails, we know where the next potential support level currently sits.