General Electric GE Crushes to New Lows in Trendline Arc Pattern
General Electric continues to struggle with a breakdown to new swing lows this morning.
We’ve been discussing this “Rounded Arc” pattern as seen from our July 10 post “GE Struggles with Weekly Arc Lower.”
Today, we’re seeing a resolution of that arc with continued downward momentum in price.
Here’s the latest developments:
This morning price gapped down to the $25.00 per share pivot level before bouncing higher toward $26.00 per share mid-day.
Just like Goldman Sachs earlier this week (as we updated), GE beat Wall Street estimates on today’s earnings but it didn’t matter as shares collapsed – that’s still one of the most frustrating things to deal with as traders.
Yet here we are with the chart and technical analysis superior to fundamentals and the complex math that goes into calculating them.
Price simply completed a bear flag retracement pattern into the falling 20 day EMA and traded – gapped – down to the lower falling trendline.
Here’s a zoom-in of that retracement trade and the collapse to the chart-based trendline target:
When price in a downtrend makes a new swing low – and is confirmed with a new momentum low (like we saw at the beginning of July) – odds favor a new price low yet to come after a pullback.
The pullback to the falling 20 day EMA occurred and price achieved its downside target – a new swing low – much sooner than expected.
This is a great example for our ongoing educational series of the “Perfect Pullback” strategy.
Keep following this pattern and the movement between these chart levels in real time.
Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”