Shares of General Electric Co. surged Thursday, to achieve a technical breakout that would confirm a bullish technical tone, after the industrial conglomerate said its aviation unit announced record orders at the Paris Air Show this week.
rose 2.8% to $10.63, marking the first close above $10.50, despite multiple previous attempts, since Feb. 27.
The stock had reached or surpassed $10.50 in intraday trading nine times before, with highs ranging from $10.50 to $10.85, but the highest close since Feb. 27 was at exactly $10.50 on May 3.
GE Aviation said CFM International, a 50-50 joint venture between GE and France-based Safran S.A.’s
Safran Aircraft Engines, announced a total $55 billion in orders at this year’s Paris Air Show, including more than 1,150 LEAP engines valued at $50.2 billion at list prices.
“There had been a pent-up demand for the CFM product, but airlines were waiting for us to put our best foot forward,” said Bill Brown, a veteran GE Aviation marketing manager. “Once we introduced a final design of the LEAP engine with the larger fan, the floodgates opened.”
Don’t miss: GE sees over $35 billion in engines/services deals.
The stock’s breakout helps confirm a bullish technical set up, as it completed a chart pattern of higher highs and higher lows.
A key tenet of the Dow Theory, which has remained relevant as a guide for technical analysts for more than a century, defines an uptrend as a pattern in which each rally closes above the previous rally’s peak, while each pullback ends above the low of the previous decline; or basically, a pattern of rising peaks and rising troughs.
Also supporting the bullish case, the stock’s 50-day moving average (DMA), viewed by many as a guide to the shorter-term trend, crossed above the 200-DMA—seen as a dividing line between longer-term uptrends and downtrends—to produce a bullish “golden cross” pattern on June 7. That suggests the stock’s sharp rally off the December 2018 low has graduated from just a big bounce to a long-term uptrend.
The last time the 50-DMA was above the 200-DMA was March 6, 2017, while the last golden cross appeared on Jan. 3, 2017.
GE’s stock has now fun up 46.1% year to date, while the SPDR Industrial Select Sector exchange-traded fund
has climbed 20.3% and the Dow Jones Industrial Average
has advanced 14.7%.