GE closes within previous day's range after lackluster session
General Electric Company (GE) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
GE finished the week 16.76% higher at 6.41 after losing $0.07 (-1.08%) today on low volume, significantly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (GE as at May 22, 2020):
Friday's trading range has been $0.21 (3.24%), that's below the last trading month's daily average range of $0.29. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GE. Prices continued to consolidate within a tight trading range between 6.27 and 6.55 where it has been caught now for the last three trading days.
Notwithstanding a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on April 9th, GE lost -1.68% on the following trading day.
Prices are trading close to the key technical support level at 6.25 (S1).
While the stock is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might speed up should prices move above the nearby swing high at 6.55 where further buy stops could get triggered. As prices are trading close to May's high at 6.74, upside momentum might accelerate should the share mark new highs for the month.
Among the two market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Although it is usually interpreted as neutral, it has actually shown to be bearish for General Electric. Out of 758 times, GE closed lower 49.08% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 51.85% with an average market move of -0.33%.