General Electric's stock is a buy, trader says after analyst calls it the 'ultimate self-help' story

General Electric's turnaround is getting more attention.

Goldman Sachs reinstated coverage of the struggling stock with a buy rating on Friday, calling it "the ultimate self-help, vaccine-leverage story" in the industrial space and saying it would emerge from the coronavirus pandemic a stronger company.

Goldman's call predicted 50% upside for GE's stock, which closed nearly 3% higher on Friday at $6.84 a share.

"I think it's a great call," Michael Binger, the president of money management firm Gradient Investments, told CNBC's "Trading Nation" on Friday.

"It's rather refreshing to have an analyst that's looking forward versus backwards," he said. "He's basing his call on really four metrics, the first being that we have a vaccine for Covid in 2021 and the economy recovers, including air travel."

Second and most important is GE's cash flow position, Binger said. Its cash flow is currently negative, but Goldman forecasted a shift into positive territory in the next three years, which GE has also said could happen, he said.

"Thirdly, he feels that their aviation division has bottomed, specifically their airline jet engine division," Binger said. "If the economy recovers, I believe that to be true. And then fourthly, he feels the Street is underestimating the earnings power of their power and renewable energy divisions. So, I tend to agree with these calls. I think next year as we exit 2021 is going to look a lot different than where we're at right now."

While Binger said a return to the $10 level wouldn't be "much of a stretch at all" for GE, which started the year above $11 a share, Craig Johnson, senior technical research analyst at Piper Sandler, took a more cautious approach.

"When you look at the chart, you could start to see this sort of symmetrical triangle that is starting to form, and that typically is an indication to us that we may be getting some sort of trend change starting to unfold," Johnson said in the same "Trading Nation" interview.

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That could bode well for GE, but other indicators suggested to Johnson that traders may be better off biding their time.

"The stock is still trading below a declining 40-week moving average, which for us still suggests that we're in a bit of a decline," Johnson said.

"If we can get a move above [$]7 and change, maybe 7.15 and change and sort of break out of that symmetrical triangle, there's a good shot that this stock could work its way up toward about 10.50," he said. "But at this point in time, I'm going to take a little bit of a wait-and-see approach to see if we can get that breakout. And with earnings coming here in a few weeks, I'll wait for that earnings print to come out before I start stepping into this stock right now."

For Gradient's Binger, the key to unlocking more gains for GE was the aerospace business.

"I think the key to this whole story is that in 2021 the airline industry recovers, aerospace and all the after-market parts they sell there, so, I think that is what will drive free-cash-flow-positiveness in 2021 and propel the stock higher," he said.

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