General Electric Bounces Back After Announcing Acquisition: What's Next?

General Electric Co. GE shares are trading higher Tuesday after the company’s digital unit agreed to acquire software company Opus One Solutions Energy to enhance its renewable offerings.

The stock looks to be bouncing back after falling below support in a pattern.

General Electric stock was up 3.36% at $93.01 Tuesday morning at publication.

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General Electric Daily Chart Analysis

• The stock was trading in what traders call an ascending triangle with resistance near $115 before it fell below the higher low trendline. The stock took a bearish turn after this support level was broken, but after the announcement of the acquisition, the company is bouncing back.
• The stock trades below both the 50-day moving average (green) and the 200-day moving average (blue). This indicates bearish sentiment and each of these moving averages may hold as an area of resistance in the future.
• The Relative Strength Index (RSI) is seeing a bounce back today and pushed higher to 41. This shows that more buyers have moved into the stock after the news, but still there remains more overall selling pressure.

What’s Next For General Electric?

General Electric broke below the moving averages and the support level and began to start down-trending. The acquisition news could be the catalyst to help the price bounce back and begin trending higher once again. Bulls are looking to see the stock cross back above the higher low trendline and for the stock to hold this area as support again before going on to break above the $115 resistance level. Bears are looking to see the stock continue to trade below the higher low trendline and want the stock to begin to form a lower high trendline to show it is still trading with weakness.

Photo by Júnior Ferreira on Unsplash