If you’re one of those investors waiting for a longer-term recovery in GE, a stock I watch closely myself, it seems we may have to wait a little longer following the last few days of price action. Yesterday’s price action certainly confirmed the bearish sentiment for the stock which closed with a wide spread down candle on high volume and descending towards the volume point of control at $11.28 per share. The next big date for this stock is the quarterly earnings release due on 29th January with a consensus EPS forecast of $0.18. The same quarter last year reported earnings of $0.14 which exceeded expectations by some distance. A tougher hill to climb this time around, but if exceeded will give GE a boost, and will perhaps be the catalyst for a longer-term recovery and move away from the congestion phase now in prospect around the $11 price region.

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The weekly chart adds some detail to this analysis. Note how we have seen two consecutive weeks of weak price action with two attempts to rally both snuffed out in short order and on good volume. So it has been no surprise to see weakness develop and we also have some clear levels now ahead. The first is as $10.80 followed by $10.50 and thereafter back into the doldrums of single figures once more…BUT, provided we hold above $10.50, the bullish sentiment may prevail longer term with a move through $12.70 opening the way to a sustained recovery. 

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