General Electric Company (GE) is the oldest publicly traded electric company in the US markets…
And it just set up for a confirmed short opportunity.
With the exception of a rally off of the March 2020 low, this company has been in a downward spiral for nearly two decades.
That’s right… This market has been in an identifiable downtrend since its high in 2000.
GE never fully recovered from the dot-com bust!
Those who held this as part of their portfolio have been sucking wind and have been well under water for a long time.
This is one of those stocks the Baby Boomer generation needed to buy in the 1970s and 80s with the intention of owning it for a lifetime.
But since we’re not in the 1970s or 80s and we can’t dial back time, we’re going to trade it!
The Short Setup
As it sits today, GE is in an identifiable downtrend and just settled below a known area of support… A full channel extension.
It has created a shorter-term structure for profit-taking purposes.
The idea is to sell this stock around $71 and buy it back this upcoming week at $65 and descending.
A descending target in a shorting position means the reward grows with time. Let’s take a look at the chart and see…
I’m looking for a quick gain of approximately 9%.
The options on this stock are very liquid. I bring this up because 9% doesn’t really excite me too much, in the sense of shorting the stock itself.
On the other hand, a 9% move on an underlying stock in the options market could end up being very exciting.
So, my thought is to keep it simple and buy a put option.
I would likely look at GE’s September 16, 2022 option chain and the $70 strike put (GE220916P00070000) for an opportunity to capitalize on this, not paying more than $5.75 per share.
That 9% stock move could offer upwards of a 70%+ return on those put options.
So, if the underlying stock tested my $65 target expectation, I’d liquidate my position for profits.
I’ll do my best to keep you updated on this trade idea as it progresses.
Get Josh’s Take
My good friend and professional trader Josh Martinez uses a similar technical approach to the markets inside of his entry level futures trading service, Futures War Room.
Josh is one of the greatest futures traders I know. We often bounce ideas off of each other as we analyze the market.
He describes his futures trading strategy as possibly “the world’s most profitable side job”…
This strategy helped Josh turn an initial deposit investment of $500 into $39,282 in less than two years.
All you have to do is access a little-known portal in your brokerage account and start copying Josh’s strategy — step by step, and trade by trade.
It really is that simple.
Rules to Live By
“If we have no peace, it is because we have forgotten that we belong to each other.” Mother Teresa
Until next time, I wish you a beautiful and blessed day!
Yours In Trading Success,
Anthony Speciale Jr.