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How GE’s Chart Looks After Plans to Split Business Up

General Electric stock hit multi-year highs in the session, but is now fading considerably. Here's how to trade it going forward.

General Electric  (GE) - Get General Electric Company (GE) Report shares were talk on Wall Street on Tuesday morning, with the stock up 5.8% at the open.

Shares weren’t vaulting higher on earnings. Instead, they were ripping higher on the company’s plan to split the company.

Unlike the situation were Amazon  (AMZN) - Get Amazon.com, Inc. Report investors are begging for a stock split, General Electric is actually splitting up the company. Ironically in the comparison to Amazon, GE actually reverse split its stock a few months ago. 

In any regard, General Electric is breaking into three separate companies, those being energy, healthcare and aviation.

The stock responded really well, but is now up just 2% on the day.

Trading GE Stock

Daily chart of GE stock.

Daily chart of GE stock.

The action we have here is painfully similar to earnings. The company reported its quarterly results in October, breaking out over the $107.75 area as a result.

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However, GE stock faded hard and closed below $107.75. In the following session, it sank again, but at least found support where it needed to at the 200-day moving average.

GE shares were grinding higher after that painful fade and were again breaking out over $107.75 this week. Then today’s news hit the wires and that really shifted things.

Suddenly we had a monthly-up rotation over $111 and the post-earnings high, as well as a push to new multi-year highs over $115.32.

As soon as GE stock failed to hold the $115 level, bulls were at risk of a larger fade. That said, the charts still have potential if GE stock can stay above $111.

Maintaining above the October and post-earnings high is a bullish development, even if today’s fade is another frustrating observation, which has been the trait in General Electric all year long.

If the stock loses the $111 level, it puts the $107.75 level back in play, along with the 10-day moving average.

On the upside, keep an eye on $115.32. Back above that mark puts the November high back in play at $116.17.

If GE stock can push up to new highs, the 161.8% extension could be in play, meaning General Electric could rally to the $125 to $127.50 zone.