Is General Electric at the Top of Its Class?

With shares of General Electric (NYSE:GE) trading around $23.39, is GE an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework.

T = Technicals on the Stock Chart are Strong

General Electric stock has been on a tear as of late. In fact, the stock is currently trading at 3-year highs. Price action for GE is dominated by higher highs and higher lows, the definition of an uptrend. So, look for this price action to continue. Most recently, the company gapped-up into new high territory and above previous resistance near $23 per share.

GE stock is trading healthily above is 20-day, 50-day, 100-day, and 200-day simple moving averages. The moving averages are also trading upward-slopping and in consecutive order, a strong sign of a powerful uptrend.

In regards to the options markets, the overall implied volatility level is at lows for the stock. The implied volatility skew of March options is normal on the put side while the call side is showing a small upward slope. What does this mean? Since over-implied volatility levels are near lows and the March put skew is normal while call skew is upward sloping, put action is not of concern while call action is signs of bullish sentiment…