Swing Trader sees 'new life' for GE

Last week, I featured a post from turnaround expert George Putnam, who forecast that after several years of sideways action, General Electric (NYSE: GE) was poised for long-term improvement.

The stock is also gaining attention from advisors who focus on shorter time horizons. Indeed, trading expert Melvin Pasternak is now recommending the shares for a move to the mid-$40s.

The editor of Swing Trader explains, "GE peaked at just over $60 in early 2000. From there, the stock lost nearly two-thirds of its value, hitting a low near $20 toward the end of the 2002 bear market."

The technician continues, "The stock had been marooned in two prolonged trading ranges over the past two years. The first occurred from late 2005 to late 2006, between roughly $30 and $35. The second was from January 2007 to July 2007, from approximately $33 to $38."

Since recently reporting earnings, he asserts, "GE is showing new life. It has broken decisively out of its trading range and is climbing its upper Bollinger band higher."

Volume, he notes, has been about 35% above normal weekly levels in recent weeks, which he states is suggesting strong institutional accumulation. He adds, "The stock is above an upward-sloping 30-week moving average, suggesting it is in a bullish phase."

For the technically savvy, he notes, "ADX and MACD are on strong buy signals. Stochastics and relative strenth are somewhat overbought, but given the long base GE is breaking out of, I am not concerned." The trader's target for the shares is a move to $44.95.

Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.