General Electric Earnings Preview: Here’s What the Charts Say

General Electric has been a big winner over the last few months. Will management give investors a reason to bid GE higher on earnings? Let’s look at the chart.
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Since the start of the fourth quarter, General Electric  (GE) - Get Report has been on fire. Investors will look for the stock to maintain that momentum after it reports on Tuesday.

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

Daily chart of General Electric stock.

Daily chart of General Electric stock.

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.