Shares have risen more than 75% since the end of the third quarter. However, from its highs on Nov. 24 roughly two months ago, GE has gained only 1%.
On the one hand, bears are thinking that the run has been too much over the past few months.
But bulls are thinking the recent consolidation - despite the stock still moving to new highs in December and January - could pave the way to a larger rally.
Obviously earnings will play a role in the outcome. A positive result and bullish commentary will be the necessary spark for longs. Will they get it?
Trading General Electric
I like the recent pullback in GE, but it’s noteworthy how the stock hasn’t tested its 10-week or 50-day moving average since October.
I would have liked to see a little more of a shakeout ahead of earnings down to this level. If General Electric reports a good result but has a muted or slightly lower reaction, investors will want to know this area.
The 10-week and 50-day moving averages are both in play near $10.70. However, a close below that mark opens up the January low at $10.40 and the 61.8% retracement near $10.30. Below both would be a bearish development.
It may put the December low near $10 on the table and potentially more downside depending on how the stock reacts.
If GE stock is able to hold up over the $10.70 area - with or without a lower reaction first - then investors need to know the upside possibilities as well.
If the stock can reclaim the 21-day moving average, which it failed to reclaim on Friday and found as resistance on Monday, then the 78.6% retracement is on the table.
General Electric hasn't been able to close over this retracement level on a weekly basis since it lost this mark in February. It would be quite bullish for GE to reclaim the 78.6% retracement and take out the January high at $11.91.
Should shares clear $12, it could put a move up toward $13 in play. Near that level, General Electric stock will find 2020 high, as well as the declining 200-week moving average.