He also shows that the stock has risen above the 150-day moving average, and we can see that the average is supporting the long-term trend and price of the stock. The struggle between buyers and sellers is intensifying and the price range is becoming smaller and smaller.
As of right now, we do not know which way it will go, but as previously mentioned, there is a 70 per cent probability of a rise. As a gambler, I'm willing to buy a call ahead of the break out, since the loss is limited to less than 10 per cent of the value of GE.
I've been studying charting patterns for only a few years. I do not claim to be an expert at all, but I have seen these patterns before and I have made some good money. If the stock does break upwards, you would then target the rise measuring the height of the triangle, approximately $3 a share. Once the rise starts, the stock will move $3 up before entering a new pattern or decreasing.
Jan 29, 2010: General Electric Trading Opportunity
I recently discovered a show on MSNBC called Options Action. It is one of the best options shows I have seen on television. It caters to both the novice options trader and also the sophisticated, and even presents opportunities galore.
In one of their segments, a technical analyst showed a chart of General Electric [GE:NYSE]. The stock has been down for the last two years, and has been a terrible investment, but a technical break out is inevitable.
What he presents is an ascending triangle that has developed. This is easily differentiated from a wedge because of the lower highs and higher lows: a rising wedge would have higher highs and higher lows. According to the show, this pattern usually indicates a continuation into an upward breakout, which occurs about 70 per cent of the time. What a trader will want to see is a break out above the trend lines, which I have drawn in, as well as strong volume above the normal. Strong volume indicates conviction.
He also shows that the stock has risen above the 150-day moving average, and we can see that the average is supporting the long-term trend and price of the stock. The struggle between buyers and sellers is intensifying and the price range is becoming smaller and smaller.
As of right now, we do not know which way it will go, but as previously mentioned, there is a 70 per cent probability of a rise. As a gambler, I'm willing to buy a call ahead of the break out, since the loss is limited to less than 10 per cent of the value of GE.
I've been studying charting patterns for only a few years. I do not claim to be an expert at all, but I have seen these patterns before and I have made some good money. If the stock does break upwards, you would then target the rise measuring the height of the triangle, approximately $3 a share. Once the rise starts, the stock will move $3 up before entering a new pattern or decreasing.
He also shows that the stock has risen above the 150-day moving average, and we can see that the average is supporting the long-term trend and price of the stock. The struggle between buyers and sellers is intensifying and the price range is becoming smaller and smaller.
As of right now, we do not know which way it will go, but as previously mentioned, there is a 70 per cent probability of a rise. As a gambler, I'm willing to buy a call ahead of the break out, since the loss is limited to less than 10 per cent of the value of GE.
I've been studying charting patterns for only a few years. I do not claim to be an expert at all, but I have seen these patterns before and I have made some good money. If the stock does break upwards, you would then target the rise measuring the height of the triangle, approximately $3 a share. Once the rise starts, the stock will move $3 up before entering a new pattern or decreasing.
Friday, January 29, 2010
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