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GE: $21.30

June 20, 2008 11:30 PM

There should be buyers above $21.30 on GE. I know, I know, it is way below where we are, but this thing is getting crushed. I would start to look at GE around $25 if the market gets torched some more as I believe technicians will be buyers above $21.30. It is the 10 year low and a reversal low. It is getting rather sad when I have to go back 10 years to find support, but that’s where we are at on GE. Just put the number in the back of your head for future referance.

GE action should convince people to use stops. I said GE had to hold $28.38, it didn’t. Once that cleared, you should have exited the stock, and waited. Period. Do not guess. Similar to what i said on GM, that it HAD to hold $15.50. It is $13.79 now. In three days, 20% lower. Why you would want to buy GM I have no idea, but still do not ignore numbers.

Written by Tom@StockBlade.com · Filed Under GE | 3 Comments 

GE: No Sign Of A Low

June 19, 2008 11:11 PM

I have no idea of where the bottom is in GE here. The reversal attempt was taken out yesterday and now there is no sign of a bottom. There should be value (trap?) buyers at some point, but not certain when they will step in. I believe the issue is GE is widely regarded as a proxy for the US economy and the economy is getting worse and rapidly as I have warned for over 6 months.

Buying GE here you are guessing. I am not a fan of guessing as I have made very clear many times.

Written by Tom@StockBlade.com · Filed Under GE | Leave a Comment 

GE Cleared $28.38 Not Good

June 19, 2008 12:14 AM

GE cleared the attempt at a reversal. I am not sure how low it will go now, but “lower before higher” should be a near certainty. The problem was the market was in trouble today, as i warned last night and it has to clear $29.25 to be long, IMO. The risk/reward trade, as I see things, was to be long GE above $28.38 and see if it would hold. It didn’t, such is lfe. Once it cleared, you should have exited, limit the loss, and move on.

Market’s are not about certainty, but rather probability and knowing your risk and reward. GE should be a buy - at some point, because of the dividend. But I would not count on that to be a savior long term because rates may continue to climb and eliminate that play. Once again, we wait.

Written by Tom@StockBlade.com · Filed Under GE | 2 Comments 

GE: Finally A Low I like

June 16, 2008 11:46 PM

GE has to hold $28.38, IMO. We will know where we are tomorrow on this trade after Goldman releases before the bell. If we are going to be “ok” after PPI and GS, the trade is LONG GE here. If the market and the Dow is going to make gains, GE has to hold today’s low. Period.

This appears to be a decent risk/reward/trade. The valuation has come down, we have the number, trade it.

Written by Tom@StockBlade.com · Filed Under GE | Leave a Comment 

Trading Class 101: Understanding Gaps - A Very Important Lesson

May 26, 2008 12:20 PM

redarrowup.jpgexitdown.jpgProbably the most difficult thing in trading to understand is “gaps”. When the market or a stock makes a huge gap move from the previous day, where is the trade? If a stock gaps lower, should you sell and get out or buy more? This is not as simple as it may seem at first glance. The answer is - it depends on the reaction to the gap.

Let’s glance at GE on the huge gap lower on 04/11/2008. The closing finish that day was weak relative to the open. What does that suggest? It was extemely likely it was going lower. How low? I had no idea that day, but I knew the gap was not to be bought and was almost certainly going lower than $31.81 (and it did). What if GE had closed that day at $33.05 instead of $32.05? Then the trade was likely long once $33.05 cleared and the gap was likely to “fill”.

Now let’s look at a gap to the upside. BMC recently gaped higher on 05/16. What was the reaction that day? Was there a resounding rejection in price? No. Therefore, the trade is stay long. The only reason BMC has not moved significantly higher since is the market has plunged. Otherwise, it would be far higher. Period.

Also, look at the 04/18 gap higher on GOOG. Was the gap higher bought, or was it sold? it was very clearly bought. What is the likely direction for the stock? Higher. If you were short that stock prior to earnings (gambling) there, you would be in HUGE trouble and you would have to cover it.

You could easily spend $25,000 in a trading course and not get this seemingly small piece of information of which I have just given to you for free. That may sound like a very bold statement, but it is a fact. Watch the gaps, watch the reaction to the gap, and you will gain an understanding of where it is headed.

This is important whether trading or long term investing as you HAVE to know if you are in trouble on a stock, or not. Big gaps do not always mean what people assume. It depends on the “reaction”.

Written by Tom@StockBlade.com · Filed Under BMC, GE | Leave a Comment 

GE: Was NOT A Fan Of The Gap Low, And Still Not

May 9, 2008 10:48 PM

I have not commented on GE as not much to say. Was not a fan of the gap low, on any level, and the gap has never even come close to filling. To have any chance of filling, it would have to clear $33.66 to be long up there, and was a short there, just had not paid any attention to it lately.  It is an avoid, at best. GE is really not a “trading” stock, and will follow the Dow anyhow. The talking TV heads scream how cheap it is, the great “value” it is here, how “cheap” it is at these levels…bla bla bla. That is all fine and dandy, but that isn’t how the market works.

Written by Tom@StockBlade.com · Filed Under GE | Leave a Comment 

GE Illustrates The Risk Of Being Long Right Now Pre-Earnings

April 11, 2008 6:35 PM

I have mentioned that I believed that most companies would either miss earnings and/or guide lower. GE set the tone of the first big chip to announce…and missed they did and got CRUSHED. CEO Immelt, who I have little confidence in, tried to dismiss it as a ”temporary” one time event because of the credit freeze related to the Bear Stearns meltdown. That would be great if it were true. The reality is, as I have been yelling for a year, if not longer, is that this problem is far, far deeper than people realize. This is a fundamental problem, not a recessionary problem. The incomes in the U.S. do not support the existing consumer debt levels. This is why we have a negative savings rate and have for some time. The problem was stalled because of a paper economy from the housing bubble - now it finally has come to roost.

I have mentioned several times to AVOID anything…and I mean anything - related to the U.S consumer. This is the beginning of the consumer weakness NOT the end. People that believe otherwise are dead wrong, and I have said it for months. I thought GE might give a false rally today as 40% of their business is international. Even that could not help them. If GE could take a 12% haircut while being 40% international, it does not speak well for the current valuations in the market. Earnings estimates are still FAR too high going forward and this market is NOT cheap, regardless of the nonsense being spouted.

Next week should get very interesting as the earnings season get’s in full swing. Be careful long on anything until earnings come out on that stock, IMO. The risk is far too high for an ugly number….

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