Summary
General Electric reports its first earnings report since leaving the Dow 30 before the opening bell on Friday, July 20.
It left the Dow Jones Industrial Average at $12.74 at the close on June 25. That was a level at which to begin a core long position.
The stock gapped above my quarterly pivot of $13.04 at the open on June 26, which was tested at the post-Dow low of $13.04 set on July 5.
General Electric Co. (NYSE:GE) was the biggest loser among the 30 components of the Dow Jones Industrial Average when it left the average at $12.74 on June 25.
Back on January 23, I wrote, "Avoid General Electric Until It’s No Longer A Component Of The Dow 30," and five months later, on June 25, it was removed with a close that day of $12.74, which was the level at which to start a core holding on the bet that the stock would be a turnaround story.
In my judgment, General Electric will stay above the $10 threshold, as my monthly value level for July is $9.81. If the stock were to break below $10, many equity money managers would have to liquidate positions in the stock. The wildcard will be whether its dividend yield of 3.49% can be protected. I am not qualified to analyze this question, but I will show the daily and weekly charts to guide investors and traders though the expected post-earnings volatility.
Analysts expect GE to earn 17 cents a share when it reports before the opening bell on Friday, July 20. A report by Motley Fool suggests that the company will lower full-year 2018 guidance. The report says that the aviation segment could be under pressure. GE’s power segment relies on gas turbines in an environment of increasing use of renewable energy. Progress on cost-cutting measures could be the positive.
