GE stock | EMA50 | EMA20 | Earnings price action | 8% price drop

 

GE Aerospace

GE Aerospace (GE) shares traded more than 8% lower on Tuesday following the company’s earnings report.

This morning’s earnings report showed earnings per share of $1.15 on revenue of $9.84 billion.  Both numbers were better than investor’s expectations.

GE’s revenue almost doubled from the same time last year as the company’s fundamental business continues to show solid growth.

The drop in GE’s share price had nothing to do with earnings results and everything to do with expectations.

Since its business split in April, GE Aerospace has impressed investors.  Fundamental business operations continue to strengthen driving the stock to 40% gains in just seven months.

Analysts and investors continued to raise their expectations for the company, resulting in a situation of becoming too optimistic towards the stock.

Today’s earnings beat was accompanied with muted guidance, triggering investors to sell the news of the good earnings report.

The fast and aggressive selling has GE shares trading below their 50-day moving average.  That trendline is likely to act as support over the next week, creating a potential “buy the dip” trade for GE Aerospace.

Technically, the stock remains in a long-term bull market trend with a targe price of $220