GE is one of the major players of the DOW index that never seemed to be affected by any crisis. Its long history as a stable company never seemed to be in danger of extinction like many other former DOW components. It was always managed to play safe through its high-regarded upper management. But not everyone is immune to news. Even sour earnings can batter its stock.

Taking a look at the weekly chart, it doesn’t say much except that the volatility has increase dramatically, with bars wider in range than normal ($2 range vs. $5 in April).

 

Figure 1

The other interesting note from the weekly is the small double-bottom that formed around $31.72. It may have convinced bargain hunters to come in and buy but it’s not convincing enough because of the distance between the bottoms are short.

Moving on to the daily chart (below), the gap made back at the end of the March is already recovering slowly. While gaps are great for day traders, there are opportunities for swing traders as well, as this stock will illustrate.

 


Figure 2

But finding a bias that may coincide with the weekly chart might be difficult. There seems to be bullish sentiment in the weekly but the daily tells otherwise.

Now the gap is a tricky play, it often is a very intense area with high volume (as can be seen on the day of the gap, so lots of participants are involved from the top and bottom of the gap). Most day traders will play the gap fill. While it’s true that most of the gaps do fill, it has to happen quickly, or the participants that believe in gap fills will quickly abandon their positions. From this daily chart, the gap is filling quite nicely. Unfortunately there is a resistance right in the middle of the gap ($33.19). This is an area the bulls need to overcome if they want price to make it to the top of the gap ($36.41). If they don’t then there may be some push back down to the bottom of the gap.

For those bulls eager to get a quick fast gap fill back to the top, this area needs to be watched carefully. In addition, while most of the indexes are near their resistance areas, this could be a time for a break from the move to higher prices. This week should decide if price can take out this resistance area. The more volume there is into the push, the higher the chance of achieving it. If price makes a move back to the bottom and bounces off it, then this time the bulls have every reason to move to fill the gap as more bulls join the fray. But most importantly, watch the volume to find the sincerity of the price move.