GE SHIPPING AGAIN LOOKING EXPLOSIVE

GE Shipping was part of Momentum trade earlier but post recent breakout – there’s additional reason to bring the stock back to Momentum pack.

HAD RECOMMENDED TO BUY AT 275 ON OCT 21 TODAY STOCK HIT 311 NOW STOCK LOOKS MORE ATTRACTIVE 

HERE WAS OUR RECOMMENDATION ON OCT 21 ST
http://trendzofmarket.blogspot.in/2013/10/is-ge-shipping-getting-ready-for-big-40.html

NOW LETS TAKE A REVIEW ON HOW STOCK IS POISED TO DO IN TIMES TO COME
 

Here’s the Chart

As you can see in the chart above: GE Shipping struggled below 300 on weekly chart for more than 2 years.  Today stock made a huge jump of 6% and closed at 311 – breaking out above 300. On a weekly basis, one can assume that gains will sustain and stock will close much above 300-305 this week confirming the breakout. If that happens: it will set the stock up for major gains in weeks and months to come. 

The stock looks like a good buy at cmp of 306. One should look to exit/stop loss if stock closes below 295 this week.

IS GE SHIPPING GETTING READY FOR BIG 40 % MOVE?

Is GE Shipping Buy, Sell or Avoid? Well – Here’s what charts are saying

GE Shipping Weekly Chart

 

As you can see in the chart above: GE Shipping bottomed out much before market. It formed a base and then made a stunning up move for weeks. The rally from 210 to 290 appears quite strong and has come on back of improvement in sentiment on all shipping stocks globally – thanks to turnaround in China growth. Just look at the Baltic Dry Index weekly chart – a measure of shipping rates and how it has broken out in recent past

 

Shipping stocks have become investors favorite globally and that might be helping GE Shipping, but here’s the problem. We don’t know whether this is just one off rally more like mean reversion move or this turnaround is for real and long lasting. Remember GE Shipping has not made any real sustainable move since 2011 and all rallies have terminated at 300. See the weekly chart below

Can it be different this time?
We don’t know yet. Today GE Shipping was down and closed at 280. On Weekly chart – GE Shipping has started doing Bullish Consolidation i.e. it is not selling off at resistance but has turned sideways and absorbing all the supply. Technically, that’s positive and stocks generally lead to breakout on the upside.

How should one play?
Assume that GE Shipping is not done with the upside and stock still has significant upside left. Also, Assume that since stock made a big 38% move recently – it may do long consolidation i.e. stock may do nothing for weeks before making fresh move. And based on this assumption – one can build long position on declines near 275 with stop loss below 264 and target of 40% up move. The only issue – you may have to wait for weeks before stock makes a move and can be frustrating.ONLY GET INTO THIS STOCK IF YOU HAVE REAL PATIENCE AND IF YOU ARE READY TO WAIT AND GET FRUSTRATED .PATIENCE WILL PAY