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General Electric Co. High Potential for Continuation of Upward Dynamics

3/2/2023 2:59 PM

The stocks of the American diversified corporation General Electric Co. have been growing since the beginning of this year, but currently the quotes have reached 84.38 (Murray level [7/8]), which has been tested for several weeks, but they cannot consolidate higher yet.

The market is experiencing a state of uncertainty, and hopes for an increase in the issuer's profits this year are held back by fears of further tightening of the monetary policy of the US Fed. Recall that CEO Larry Culp spoke positively about all three key areas of the company's activities. Speaking at the Barclays Industrial Select conference, he announced expectations of a 15.0% increase in the aerospace sector's profit, as well as an increase in the production of LEAP engines by 50.0%. The prospects of the company's defense division are assessed as high, since the escalation of the Russian-Ukrainian conflict, as well as the growth of global military budgets will contribute to a significant increase in the volume of orders for defense products. The current situation, according to Culp, may also have a positive impact on the development of the energy division of General Electric Co., since due to a significant increase in oil and gas prices, investors are turning to renewable sources. Nevertheless, the positive financial prospects may be hindered by the monetary policy of the US Fed: currently, experts expect its serious tightening, which may create additional pressure on the economy and increase the downside risks.  

Technically, the mark of 84.38 (Murray level [7/8]) remains key for the "bulls", its breakout will give the prospect of further growth to the levels of 87.50 (Murray level [8/8], the area of November highs) and 90.62 (Murray level [+1/8]). If the level of 81.25 (Murray level [6/8]) is broken down, supported by the lower line of the Bollinger Bands, the decline will resume to the area of 78.12 (Murray level [5/8]) and 75.00 (Murray level [4/8]).

Technical indicators signal the continuation of the upward trend: the Bollinger Bands and the Stochastic are directed upwards, the MACD histogram is stable in the positive zone.

Resistance levels: 84.38, 87.50, 90.62. | Support levels: 81.25, 78.12, 75.00.

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