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GE: in a good position
2021-01-26 • Updated
GE reports its quarterly earnings at 15:00 MT time today.
Summary
Overall, GE appears to be in a good strategic position. Even if it doesn’t beat the market expectations on the coming earnings report, it seems to be worth to buy to make mid-term gains.
Fundamental
The consensus EPS forecast is $0.08 (against $0.21 a year ago). While the virus hit the production process of this company quite hard making it spend a lot of cash in 2020, it seems to have managed to recover well and possess enough financial capacity to carry on with its plans. In all core segments of its business such as aviation and power, the company has optimized its approach to financing to focus on profitability. In addition to that, Q4 is traditionally strong for GE. Therefore, the overall tactical and strategic outlook for GE is pretty positive.
Technical
Previously, things weren’t looking quite good for GE’s stock. As the company has been struggling to bring consistent revenues, investors have been holding mostly a bearish view on its stock. It was roughly above $6 per share at the end of 2018 but then the price reversed to the upside as the tech-giant started re-visiting the financial workings of the company. When the virus hit, the stock was going up and was trading at $13. Losing more than 50% of its value, it was at $6 again just several months ago. Currently, it trades at $11.
In the mid-term, the stock looks prepared to jump to the resistance of $11.70 and break it. The support of 50-MA touched by the current stock price seems to provide technical reassurance of that. If the marked channel stays in power, the stock will be challenging the tactical resistance of $13 by the end of March.
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