GE Aerospace Just Hit a Record High. What Its Chart Says Heading Into Earnings

$GE Aerospace (GE.US)$ will report earnings this week at a time when the aircraft-engine firm's stock is trading at or near all-time highs dating back to before General Electric's 2023-24 break-up.

Let's see what the stock's technical and fundamental analysis can tell us:

GE Aerospace's Fundamental Analysis

GE Aerospace plans to report Q4 results ahead of the opening bell on Thursday, with the stock hitting a $332.79 all-time intraday high some two weeks ago on Jan. 6.

Shares have risen 71% over the past year, outperforming the 15% gain during the same period for the $S&P 500 Index (.SPX.US)$.

For those who are unaware, the original General Electric split into three independent public companies in 2023 and 2024.

GE Aerospace makes airplane engines and other aerospace products, while $GE Vernova (GEV.US)$ produces power-generation and electrical equipment, and $GE HealthCare Technologies (GEHC.US)$ focuses on medical devices.

GE Aerospace took over the "GE" ticker, which has always had an outsized interest among retail investors.

The Street is currently forecasting that GE will report $1.44 in Q4 adjusted earnings per share on $11.2 billion of non-GAAP revenue.

That would represent a 9.1% year-over-year gain from Q4 2024's $1.32 in adjusted EPS, as well as a 13.4% y/y increase from the $9.9 billion in non-GAAP revenue the company saw in the same period last year. In fact, $11.2 billion in revenues would be the strongest quarterly sales that GE has seen since Q2 2024.

And interestingly, 11 of the 16 sell-side analysts that I know of who cover GE have revised their earnings estimates higher since the quarter began, while only one has cut their numbers. (Four estimates remain unchanged.)

GE Aerospace's Technical Analysis

Next, let's look at GE's one-year chart running through Thursday afternoon (Jan. 15):

Readers will see that GE sold off in April coming out of a double-top pattern of bearish reversal, as marked with red jagged lines at the chart's let.

The stock then rose slightly more than 100% since bottoming out last April.

However, GE has been developing a rising-wedge pattern of bearish reversal the entire time, as denoted by the two yellow diagonal lines covering most of the chart. This pattern hasn't closed yet.

In the meantime, GE has used its 21-day Exponential Moving Average (or "EMA," marked with a green line) as support for about a month. It's also taking back its 50-day Simple Moving Average (or "SMA," denoted by a blue line).

That said, GE hasn't touched its 200-day SMA (the red line) since April. No kidding.

As for other technical indicators, the stock's Relative Strength Index (or "RSI," marked with a gray line at the chart's top) is better than neutral, but is nonetheless off of its strongest levels.

Meanwhile, GE Aerospace's daily Moving Average Convergence Divergence indicator (or "MACD," denoted by black and gold lines and blue bars at the chart's bottom) was set up bullishly until very recently.

However, the histogram of the 9-day EMA (the blue bars) has suddenly fallen below the zero-bound, while the 12-day EMA (the black line) has crossed below the 26-day EMA (the gold line). These are potential warning signs.

An Options Option

Options traders who are bearish on GE's earnings could likely set what's called a "bear-put spread" in this scenario.

That's where you go long one put and short another one at a lower strike price, but where both have the same expiration date.

This strategy might also be employed by investors who are already holding GE shares and want to try to protect any large profits.

Here's an example:

-- Long one GE put with a Jan 23rd expiration (i.e., after Thursday's earnings) and a $315 strike price (the stock's 21-day EMA). This cost about $6.75 at recent prices.

-- Short one Jan. 23 GE $300 put for roughly $2.25.

Net Debit: $4.50.

A pure options trader is risking $4.50 to try to bring back $15, for a $10.50 maximum theoretical profit.

And as for equity investors who already hold GE stock, the above trade creates a situation where they might exit their positions while extracting $10.50 from their holdings and still possibly come out long the same number of shares. This would happen if GE is below $300 at expiration.

(Moomoo Technologies Inc. Markets Commentator Stephen "Sarge" Guilfoyle had no position in GE at the time of writing this column.)

This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. Moomoo and its affiliates make no representation or warranty as to the article's adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.

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