I noted to subscribers yesterday that General Electric (NYSE: GE) continues to hover just above a critical long-term support plateau between 23.30 and 22.00, which if violated and sustained could trigger a powerful long-side liquidation that drives prices to 18.00-17.00 next.

What is very worrisome is the sharply negative angle of descent of the 40-week moving average, which is similar to the price-MA juxtaposition that emerged on the downside after the peak at 60.50 in August 2000 that pressed the stock to 21.40 in October 2002. If a decline of similar magnitude is in progress now, GE must not break and sustain beneath 21.65 to avert a plunge towards the next intermediate-term swing target of 15.00.

By Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com (www.mptrader.com) , a real-time diary of Mike Paulenoff's trading ideas and technical chart analysis of Exchange Traded Funds (ETFs) that track equity indices, metals, energy commodities, currencies, Treasuries, and other markets. It is for traders with a 3-30 day time horizon, who use the service for guidance on both specific trades as well as general market direction

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