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| GE Weekly Chart |
TAOST Select Data
Short Interest
I would expect short interest to be much higher as a percentage of the float given the stock's structure... But it makes sense... the stock has bounced from its $6.66 52 week low over the last 6 weeks. High short interest is like jet fuel to the upside... without it I feel even better about the short idea.
How To Trade It
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| GE Daily |
Short The Stock
Of course you could short the stock on a good signal to the downside... Perhaps wait until price breaks the low of the preceding week's candle and short the stock outright.
Trade The Options
I think the better idea is to buy January 2020 Puts (options contracts that climb in value if the underlying stock falls) when the chart gives a good signal.
As the chart above (courtesy of Yahoo Finance) shows, you could purchase a single $3 strike contract for $8.00.
Yes... you read that right... on Friday afternoon, $3 strike January 2020 put options could have been purchased for $.08 each (a contract represents 100 shares of the underlying).
The closer $5 strike puts could have been had for $27 per contract.
My point here is that if you believe the analyst (and agree with the chart), $GE could certainly see $5 or below. This is a relatively low risk way to get exposure to that idea.
Full disclosure... In my mind, $GE still has a good business... lots of them in fact. I have a really hard time imagining the stock falling through $5....
But that's gut feeling.
One of my rules is "Trade what you see... not what you think."
I suggest you do the same.
