Why General Electric Stock Is a Better Buy Following Earnings

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Lately it seems that the turnaround in General Electric (NYSE:GE) stock is on track, but should we believe the hype? The decision is actually quite easy for General Electric stock investors.

Why General Electric Stock Is a Better Buy Following Earnings
Source: Shutterstock

Since hitting an intermediate peak a bit over three years ago on the heels of the 2008 – 2009 financial crisis, General Electric continues to demonstrate the once-mighty industrial blue-chip is on the mend. The company’s Q2 earnings confessional at the end of July is proof of that.

In a nutshell, General Electric delivered a profit and revenue beat for its second quarter, while raising its full-year profit forecast by a nickel to a range of 55 cents to 65 cents per share. The company also offered upwardly revised free cash flow guidance and noted improvements and signs of stabilization in its sluggish power business, which has been a formidable Achilles Heel for GE stock’s turnaround story.

Wall Street’s reaction to the report though, proved skeptical. After taking shares to a fleeting marginal five-month high, it has been all downhill. General Electric stock is off roughly 12% and near its three-month lows just several sessions past the earnings event.

So, what are today’s investors to believe, the quarterly report and GE’s update on its business situation? Or is the weak response on the General Electric stock chart to be respected? It’s our observation it’s time to embrace a turnaround off and on the price chart with shares now strategically positioned for bullish investors.

General Electric Stock Daily Chart

GE Stock Daily Chart
Source: Charts by TradingView

Despite enjoying a year-to-date gain of around 23%, which rivals its former Dow Jones constituents Home Depot (NYSE:HD), Cisco (NASDAQ:CSCO) and IBM (NYSE:IBM), it hasn’t been an easy ride for GE stock bulls. Shares were up as much as 55% in late February. And over the past few months there have been plenty of occasions filled with despair and hope as shares have meandered laterally.

In the here and now though, it would be very hard to argue against General Electric stock’s bullish positioning. Technically, shares have formed and confirmed a higher low pivot that’s nestled across the longer-term 200-day simple moving average. GE’s stochastics are also oversold and mostly conducive of buying this past week’s pullback into trend support.

Ultimately, GE stock offers a low-risk foothold into shares with the potential for outsized returns. If you see the company’s turnaround as the real deal and another about-face readying within GE stock’s uptrend, a quarter risked is either a great investment or certainly a well-conceived and smart exit strategy.

Disclosure: Investment accounts under Christopher Tyler’s management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies, related musings or to ask a question, you can find and follow Chris on Twitter @Options_CAT and StockTwits.

The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.


Article printed from InvestorPlace Media, https://investorplace.com/2019/08/why-general-electric-stock-is-a-better-buy-following-earnings/.

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