Whether you’re a trader or a buy-and-hold investor, everyone can find some fundamental appeal in Wall Street’s giants. They have huge market caps and market share, and are growing nonstop. They also boast strong product pipelines and have catalysts in place that will drive their stocks higher both in the near term and the long term.
But I’m getting in touch today because two of the country’s 10 largest publicly traded companies — Apple Inc. (AAPL) and General Electric Company (GE) — are catching my eye from a technical perspective right now. I see potential in both, and since you all know by now that I’m a chart guy, I wanted to dive into the specifics.
Apple Inc. (AAPL)
Let’s start with Apple. AAPL stock took a major hit after the company reported its first quarterly sales decline since 2003 on April 26 and is now flirting with a very important support level at $92. If broken, we could see the stock fall to its lowest prices since June 2014.
We’ve talk about the important of this support line in the past. It was the low from last August’s flash crash that was tested in January and February before AAPL rallied back above $110.
The post-earnings breakdown was on very heavy volume, which is typically a bearish signal. However, the continued selloff has seen volume steadily decline, suggesting that the selling may be coming to an end.
So the question now is will buyers be willing to swoop in once again at this $92 level? My guess is that they will, especially with a 2.4% dividend yield adding to AAPL’s overall return.
General Electric Company (GE)
General Electric Company (GE) is the other name I want to look at.
Unlike Apple, GE stock isn’t getting punished here, and its chart is much more impressive. The stock is down about 3.5% so far this year after pulling back from a multiyear high, and I like that it has held nicely above support down at $28.55.
General Electric has seen its fair share of above-average volume days, but overall the recent pullback has been methodical. In my opinion, this is a very normal and healthy bout of weakness that often follows a new high. The total dip is about 8%, which is right in line with a typical post-high pullback, especially during a time of market weakness.
Swing Trades I See Right Now
AAPL: Apple is a great buy at current levels, although I would implement a very tight stop-loss of no more than 4%. I see upside potential of 14% if the stock were to fill the gap left from the disappointing earnings report.
GE: General Electric is also a presenting a solid buying opportunity, and I’d implement a stop-loss just under current support around $27.50. The stock’s 3% dividend yield is simply the cherry on top of the rebound sundae.
Matthew McCall is founder and president of Penn Financial Group, an investment advisory firm. Matt also is Editor of FUTR Stocks, the ETF Bulletin and Co-Editor of Breakout Stocks.
