Disclosure: I do not hold a position in General Electric.
The Dow Jones Industrial Average set an all-time intraday high today, as General Electric (GE) remains mired in bear market territory, down 23.7% year-to-date at Wednesday’s close of $24.11. Here’s why GE should be bought now.
The daily chart for General Electric shows a stock that’s been below a “death cross” since March 7 when the stock closed at $29.86. A death cross occurs when the 50-day simple moving average declines below the 200-day simple moving average indicating that lower prices lie ahead. This correctly tracked the stock to its post-election low of $23.58 set on Sept. 8. At the low, GE traded just above my September value level of $23.38.
GE has a favorable dividend yield of 4.11%, which makes the stock a solid candidate to be one of the “Dogs of the Dow” for 2018.
The daily chart for GE
The daily chart clearly shows the death cross with the 50-day and 200-day simple moving averages now at $25.30 and $28.60, respectively.
Richard Suttmeier, a former Treasury bond trader, has 45 years experience in the financial markets. He’s an engineer by education with a master of science degree.