General Electric: Consolidating After Meeting Resistance In October
Dragonfly Capital | Nov 09, 2015 07:38AM ET
Here is your Bonus Idea with links to the full Top Ten:
General Electric (N:GE) is a large conglomerate, meaning it has many different businesses. One is lighting, in Nela Park in Cleveland and they set up an excellent Christmas display.
The stock went through a slow rounded decline from April through to the August low. It consolidated then for a month before jumping higher to start October. That met resistance at 30 mid month and has been consolidating since.
A break to the upside carries a target on a Measured Move to 35.25 and there is support for more upside from the bullish RSI. The MACD has been in a shallow decline during the consolidation but remains strong. A push through the signal line would bolster the bull case.
The Bollinger Bands® are turned higher as well, allowing a price rise. And there was a bullish Golden Cross just last week. There is resistance at 30 and then 31.50 before 33.50 and 36 then the 2000 high over 40. Support lower comes at 29 and 28 followed by 27.50. Short interest is low at 1.3%, and the company does not report earnings again until January 22, 2016.
Looking at the options chains, the November 13 Expiry shows large open Interest (OI) at 29 on the Put side and then 30 on the Call side. November monthly options also show 29 and 30 to be the biggest OI, but in much larger size. The January 2016 chain shows massive OI at 35 above on both sides with large OI at 30, 27, 25 and 23 below. On the Calls side, 30 and 31 are large.
General Electric, Ticker: GE
Trade Idea 1: Buy the stock on a move over 30 with a stop at 28.50.
A straight stock trade.
Trade Idea 2: Buy the November 30 Calls (offered at 48 cents late Friday).
A short term defined risk trade.
Trade Idea 3: Buy the November 29/30 bull Risk Reversal (25 cents).
Using leverage and a knowledge of the options open interest for a short term trade
Trade Idea 4: Buy the January 30 Calls (82 cents).
A longer term defined risk trade.
Trade Idea 5: Buy the January 30/November 31 Call Diagonal (70 cents).
Anchoring the trade with the January Calls and selling short term, higher strike calls over time to reduce your cost.
Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.