GE Performance Relative to XLI

$GE $XLI

There’s been a momentum divergence in XLI 0.00%↑ over the past 2 months. Some of that looks to be coming home to roost today.

There’s been a similar momentum divergence in $GE, which is the largest component of XLI 0.00%↑ . It’s worth noting that XLI 0.00%↑ is diversified, and GE 0.00%↑ is approximately 4.76% of the weighting.

The zoomed out look on GE 0.00%↑ is extremely constructive, as the stock is at 8 year highs. There’s a case to be made that risk/reward favors the longs when balancing against the 2016 high.

On a ratio basis, we can see almost the inverse of the move the stock experienced beginning in 2016

Taking these charts in the aggregate, I think there’s a good bull case for a GE 0.00%↑ long, with a stop-out around $160 (~3.75% downside from todays price).