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General Electric Company (NYSE:GE) struggled Tuesday– and we anticipate that it will for the foreseeable future — as the company reported that its GE Capital unit is going to be taking a $6.2 billion charge on its insurance portfolio in the fourth quarter and that the unit is going to need an additional $15 billion during the coming seven years to stabilize its insurance reserves.
This news has reignited concerns that GE is simply too big and unwieldy and may need to be broken up. In the long run, that might actually be the best strategy for the company. But in the short run, while traders are wondering every day whether the market has reached its peak and is about to sell off, we expect this uncertainty to drive the stock lower. We’re looking for GE to drop back down to its recent lows around $17.25 in the run up to the company’s earnings announcement on Jan. 24, before market open.
‘Buy to open’ the GE March 17 Put (GE180316P00017000) for a maximum price of $0.44.
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