Neutral Short Term Pattern on General Electric

Published on Thursday, 12 July 2012 04:18 Written by TradersHuddle Wire

New York, July 12th (TradersHuddle.com) - Shares of General Electric Co. (NYSE:GE) closed the trading day higher by $0.06 or 0.31% from its previous close. General Electric's price action formed what is considered to be a doji close, where the open and close prices are very close to each other, mainly signaling an indecision between buyers and sellers.

General Electric Company (NYSE:GE) is a diversified technology, media, and financial services company. The diversified corporation offers products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content, and industrial products. General Electric conducts operations globally, and its consider a bellwether of the U.S. economy, as it participates in so many segments of the economy. GE was founded in 1892 and is based in Fairfield, Connecticut.

General Electric's trading range is defined by a trough, which marked calculated support at $19.50 and by a peak that set the resistance point at $20.84. These levels are closely watched by traders managing their positions.

Traders wanting to establish a position in General Electric or traders that are already holding the stock can use the doji close to their advantage, since the pattern present a short-term pause in the stock's price action. This pause results in an entry point for traders depending of which way the stock resolves this short-term indecision.

The Doji is an important candlestick pattern that provides information on their own and as components in a number of important patterns. Doji form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary and the resulting candlestick looks like a cross, inverted cross or plus sign. Alone, doji are neutral patterns.

Any bullish or bearish bias is based on preceding price action and future confirmation. In the case of General Electric, given that the stock finished the session higher, bulls should monitor their positions for confirmation that the stock will continue higher by taking its intraday high. Below a Doji illustration: