GE Doesn’t Just Have Supply Chain Issues

The CFO of General Electric (GE) told shareholders and analysts Thursday evening that the supply chain was putting pressure on margins and free cash flow. Let’s check and see how that is playing out on the stock price.

In the daily bar chart of GE, below, we can see the price action as of Friday’s opening. The shares have gapped lower and are trading below the 50-day and the 200-day moving average lines.

The On-Balance-Volume (OBV) line has been rolling over in August and so far into September. The Moving Average Convergence Divergence (MACD) oscillator has crossed below the zero line for a new outright sell signal.

In the weekly Japanese candlestick chart of GE, below, we can see a bearish condition even though this week’s candle has not yet been plotted. Prices are trading below the bearish 40-week moving average line.

The weekly OBV line has been weak for close to two years now. The MACD oscillator is bearish. A test of the lows at $60 seems likely.

In this daily Point and Figure chart of GE, below, we can see a downside price target of $65 and the support at $60 is not that impressive.

Bottom-line strategy: Avoid the long side of GE as the charts suggest we could see a longer-term decline to the low $40’s.