The monthly chart for GE makes grim reading for longer-term investors and the heady days of $32 per share seem a dim and distant memory. So the question now is whether it is time to buy as a speculative longer-term buy and hold, and for this, we need to consider the monthly chart. And what stands out immediately here is the volume for last month which was comparable with that of March, yet look at the difference in price spread.
In addition note two other factors. First, we have a volatility candle on the chart and coupled with high volume signals a potential reversal with the market makers clearly participating. Second, note the depth of the wick on this candle which signals strong buying as the stock sold off. Now consider this against the price action for April, with the narrow spread and equally high volume. This is a clear and unequivocal signal of buying and accumulation of which March was the first phase, so we are now witnessing the development of a new campaign for the stock which is likely to result in further ‘mopping up’ of the sellers, before a saucer bottom forms and longer-term recover begins.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
Anna you have to be mad to buy any stock, short yes.