Breakouts Are Occurring Everywhere

Breakouts are occurring everywhere. IBM has just broken out above $120. If we close here, it would be a 52-week high. As it hit $120, volume picked up dramatically.

This is what happened yesterday with our parent company, General Electric, as it hit $15 for the firs time since January.

Nearly 150 new highs on the NYSE, the most since September of last year.

In financials, American Express and JP Morgan at highs for the year.

GE: what's driving the price? Our parent company, General Electric, is up 20% in September.

A couple issues are likely moving the stock, traders tell me.

1) The analyst meeting tomorrow, and while the consensus is that there is unlikely to be a "formal" update on guidance they will likely, as Goldman Sachs put it, try to boost "investor confidence in GE's ability to grow at rates competitive with the broader sector."

2) GE's dramatic underperformance in the past year (down 33 percent vs. down 13 percent for the S&P 500) is coming to an end as the global markets slowly improve.

3) the upcoming Vivendi "put" on NBCU. Each year from mid-November to mid-December, Vivendi has the right to sell its 20 percent stake in NBC Universal.

There are several different options here, should Vivendi decide to exercise that right:

1) GE could purchase the stake outright (it has right of first refusal);

2) Vivendi could conduct an IPO for their 20% stake;

3) there could be a private placement;

4) there is a deal between GE and Vivendi to IPO or sell all of NBCU.

This normally does not elicit much comment, but a recent article in Broadcasting & Cable suggested that GE may be exploring strategic options for NBC Universal. _____________________________


Questions? Comments?