General Electric (NYSE: GE) shares are falling after a JPMorgan analyst downgraded the stock to Neutral from Overweight, adding in a note that GE will face challenges in its aviation unit and real estate operations due to market difficulties in both sectors. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on GE.

After hitting a one-year high of $42.15 in October, the stock has hit a new one-year low today. This morning, GE opened at $28.69. So far today the stock has hit a low of $27.87 and a high of $28.99. As of 12:15, GE is trading at $28.89, down $0.26 (-0.9%). The chart for GE looks bearish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $34 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade, we will make a 6.4% return in three months as long as GE is below $34 at September expiration. GE would have to rise by more than 17% before we would start to lose money.

GE hasn't been above $34 since April and has shown resistance around $30 recently. This trade could be risky if the company's earnings (due out in mid-July) are a positive surprise, but even if that happens, this position could be protected by resistance GE might find at its 50 day moving average, which is currently around $33 and falling.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent owns and controls bullish hedged positions in GE. Both those trades and the one above can close profitably independently.