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What's Next For GE After The Stock's Best Month Ever?

Jayson Derrick
·2 min read

General Electric Company's (NYSE: GE) stock in November recorded its best-ever monthly gain ever with a 40% surge, but two trading pros think the industrial giant isn't a momentum stock worth buying at current levels.

'Very Questionable': General Electric's surge throughout November needs to be put in perspective, Ari Wald, head of technical analysis at Oppenheimer, said on CNBC. Despite the stock climbing firmly above its 50-day and 200-day moving average, it's still "well below" its mid-2016 peak.

"That long-term structure, it's just very questionable," Wald said.

GE's stock momentum could be a function of it's low-price with "some beta to it," Wald said. For investors looking to capitalize on beta, he said they may want to instead consider semiconductors, capital goods and more mid-cap industrial names.

Related Link: Oppenheimer Upgrades General Electric: 'Turnaround Gaining Traction'

'Easy Money' Already Made: The "easy money" has already been made in GE's stock, Joule Financial President Quint Tatro also said on CNBC. As such, investors need to be very careful on how they approach a stock like GE that's "just off to the races."

Granted, the company is going to show improving free cash flow moving forward but it will also need to continue selling off business units, he said. These asset sales will "hinder the progress of the stock" into 2021 and beyond.

GE's stock traded around $10.17 per share at publication time.

Photo credit: Bubba73, via Wikimedia Commons

Latest Ratings for GE

Date

Firm

Action

From

To

Nov 2020

UBS

Maintains

Buy

Nov 2020

Oppenheimer

Upgrades

Perform

Outperform

Oct 2020

Deutsche Bank

Maintains

Hold

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