They say you have to dance with the devil to get out of hell, and that might be what just happened with General Electric.
Nearly a decade after hitting its financial crisis low of $6.66, GE touched the ominous level last week — and it's been roaring back ever since.
Now that his call has come to fruition, he sees support for the stock if it can clear several technical hurdles.
"We were able to hold that 2009 low and that should … limit the downside at least over the near term. However, we're going to have to see a lot more work and a lot more action in this stock before we can say the worst is behind it for sure," Maley said Tuesday on "Trading Nation."
GE stock surged 6 percent in Wednesday's premarket to $7.72 a share.
Its share price had more than halved since it began the year as of Tuesday's closing. In just the past three months, it tanked 43 percent. Its swift decline has pushed shares below support levels that could now generate resistance, says Maley.
"The stock fell so far, so fast that any resistance level, for instance, its 50-day moving average and its trend line for 2018, they are much higher than where the stock is now, 25 to 35 percent higher," he said. "When you want a stock to really confirm that the worst is behind it, you want to see it break a few resistance levels."
Maley says he'd need to see the stock form a base in the $7 to $8 range to give him a sign that its slump has come to an end. GE is still a 10 percent rally from the upper-end of that range.
Gina Sanchez, CEO of Chantico Global, says the company could rebound but its turnaround efforts will take time.
"We've seen a pretty big Hail Mary in terms of their determination to restructure the firm and to restructure the outlook for where they're going to put their focus but that's something that takes years to build out," Sanchez said on "Trading Nation" on Tuesday.
GE is in the middle of a years-long restructuring effort that has included shedding some of its peripheral assets such as finance to whittle itself down to its core industrial operations. However, some of its units, such as its power business, continue to weigh on the company.
"For the time being, it has to survive the negative headlines, and a liquidity crunch is not the kind of negative headline that you want to have, an SEC probe is not the kind of negative headline you want to have, so we're not out of the woods," added Sanchez. General Electric said in October the Securities and Exchange Commission was widening its probe of the company's accounting practices.