The shares of General Electric (GE: sentiment, chart, options) have soared more than 11% higher this afternoon following news that the company plans to reduce its GE Capital finance arm. GE Capital will be restructured into three units focused on commercial lending, consumer finance, and potential asset sales and run-offs. The blue chip is also evaluating a $5-billion capital injection into the unit. The company will rationalize the short-term funding model that led to problems during the credit crunch, halving its reliance on commercial paper and doubling the role of deposits.

Today's surge higher comes despite the company's warning that fourth-quarter earnings could fall short of expectations as it evaluates extra restructuring charges. As a result, fourth-quarter earnings are forecast at 50 cents to 52 cents per share. The company had projected 50 cents to 65 cents, and the most recent mean estimate of analysts surveyed by Thomson Reuters was 51 cents per share.

Sentiment toward the conglomerate remains relatively optimistic when it comes to options players. The Schaeffer's put/call open interest ratio for GE stands at 0.89, in the 28th percentile. In other words, options players have been more optimistically aligned toward the shares just 28% of the time during the past year.

Meanwhile, Wall Street still has its doubts. According to Zacks, the stock has earned 5 "buy" ratings and 8 "holds."

Technically speaking, the stock remains locked in a downtrend from its October 2007 peak of $42.15. Furthermore, the shares are moving into resistance at their declining 10-week moving average a trendline GE has not finished a week above since late August. Another rejection at this moving average could send the shares down for another test of short-term support at the 13 level.