An upgrade at Barclays has the shares higher again today
While the broader stock market suffered last week, General Electric Company (NYSE:GE) shares enjoyed their best week since March 2009. What's more, the stock -- which is higher today on upbeat analyst attention -- could enjoy more upside, if a recent technical signal is any indicator.
GE shares rallied last week as traders applauded a new CEO, who will receive payouts if the security rises at least 50% and stays at that level for at least 30 consecutive trading days. As such, the former Dow stock gained 16.74% last week, and came within 1% of its 100-day moving average -- a bullish signal, historically.
It's just the third time in 2018 that this GE signal sounded. Since 2009, there have been 36 signals, after which the shares went on to average a one-week gain of 0.6%, per data from Schaeffer's Quantitative Analyst Chris Prybal. Further, the stock was higher 61% of the time. That's compared to an average anytime one-week loss of 0.1%, with a 49% win rate.
One month later, GE was up 1.1%, on average, and was higher 56% of the time. Two months after a signal, the stock was 2.8% higher, on average. The security was higher 56% and 61% of the time, respectively. That's compared to average anytime losses over the same time frames, with a win rate below 50%.
It's the same story over the long term. At the six-month marker, for instance, GE was up 4.9%, on average, with a 59% win rate. One year later, the shares were 5.9% higher, on average, and in the black 68% of the time. That's compared to average six-month and one-year losses of 1.5% and 0.3%, respectively.
Today, GE stock is up another 2.4% to trade at $13.50 -- set for its highest close since mid-July -- after Barclays upgraded the shares to "overweight" from "neutral," with the analyst waxing optimistic on new CEO Larry Culp. Separately, the company's GE Capital arm agreed to sell $1 billion of energy investments to Apollo Global Management. The equity is pacing for a sixth straight daily gain, which would mark its longest daily win streak since February 2017.
There's plenty of room on the bullish bandwagon, if GE once again outperforms following the aforementioned technical signal. Currently, just four of 13 analysts deem the equity worthy of a "buy" or better endorsement, leaving the door open for additional upgrades to lure more buyers. Likewise, the stock's Schaeffer's put/call open interest ratio (SOIR) sits a 1.96 -- the highest percentile of its annual range, suggesting near-term options traders haven't been more put-biased in the past year.