General Electric (GE) – Get the General Electric Company Report Shares rose on July 18, gaining about 2% in a broader market rally. But company-specific news also pushed it higher.
And the alphabet (GOOGL) – Get the Alphabet Inc. report (GOOGL) – Get the Alphabet Inc. report After trying to bounce back after a stock split, GE stock tried to bounce back after more clarity on its business split.
Alphabet’s stock split goes into effect today, while GE’s business splits will take place in 2023 and 2024.
But GE did unveil a new logo and name for its business, which will be divided into three separate groups when complete.
GE stock had a strong run earlier this year but has underperformed over the past few months. The stock has been in positive territory in January and February — albeit with modest gains — up 0.01% and 1.1%, respectively.
GE stock was down just 4.2% at the March exit. It wasn’t until the second quarter that things started to drop. The stock fell 19% in April, rose 5% in May, and then fell 1% in June.
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GE stock found support at $60, providing the bulls with a nice double bottom.
It took only two strong sessions — Friday and today — for GE shares to jump 8.5%. That’s from last week’s low to Monday’s high.
While the rally has put GE stock above its 10- and 21-day moving averages, it still finds itself in a tough zone.
If it can hold above 21 days, GE must contend with last week’s high of $64.50 and gap-fill levels near $65.
While the gap is filled and shouldn’t play a big role, it’s worth noting how well the stock trades around that level.
If the stock clears this area, it could open up significant upside. In this case, it could bring the $69 to $72.50 area into play. This includes the 10-week and 50-day moving averages, the daily VWAP indicator, and the key support/resistance area between $71.50 and $72.50.
If GE stock sees this level, I would expect some kind of pause, if not an immediate sell-off opportunity in the near term.
On the downside, there are now $63 vacancies. If GE stock fills that void, it could mean it trades back below its 10-day moving average.
In this case, bulls must recognize that $60 may come back into play — and it may not find support a third time.