Boeing Stock: We’re Reevaluating Our Flight Plan

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In our September 30 review of Boeing Co. (BA) we wrote that, “I don’t have a lot of confidence that BA will hold its May/June lows. The risk is that we see further declines, in my opinion. Avoid the long side.”

With the benefit of hindsight we can see (below) that the lows held. Wednesday morning the aerospace giant reported disappointing quarterly results and the stock is down after briefly rallying.

Let’s check the charts and see what’s going on.

In the daily bar chart of BA, below, we can see that the shares managed to hold just above the May/June lows despite my lack of confidence. BA has rallied in October to cross above the 50-day moving average line but is still below the declining 200-day moving average line.

The On-Balance-Volume (OBV) line bottomed in June/July and shows a slow improvement but still signals to us that buyers of BA are being more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is moving up from a higher low in early October and is ready to cross above the zero line for an outright buy signal.

In the weekly Japanese candlestick chart of BA, below, we can see two trends — a longer-term downward trend and a more recent potential double-bottom pattern. Prices are still below the declining 40-week moving average line.
The weekly OBV line has improved from a low in May and but the MACD oscillator is still below the zero line.
In this daily Point and Figure chart of BA, below, we can see the strength of the recent advance and a potential price target in the $173 area.
In this weekly Point and Figure chart of BA, below, the chart tells us that prices have reached a downside price target of $131. A new upper price target has not been generated.
Bottom-line strategy: I am a little reluctant to become a BA bull because trading volume has not expanded enough to impress me and a reversal lower could develop at any point in time.