Interactive Investor

Boeing: Is a share price recovery really underway?

After a difficult three months, this analyst assesses the likelihood of Boeing shares taking off again.

5th June 2019 09:13

Alistair Strang from Trends and Targets

After a difficult three months, this analyst assesses the likelihood of Boeing shares taking off again.

The Boeing Company (NYSE:BA) 

Boeing (NYSE:BA) (currently trading at $343) does not need to seek problems at present but its share price is proving fairly resilient - so far anyway.

We do have an issue with movements this year as they suggest a future descent below $330 shall attempt a landing down at $317. We expect any bounce from this level to prove short-lived as there's a heck of an argument favouring $275 as bottom. Hopefully.

A glance at the chart immediately throws up issues with an ambition at $275.

Firstly, and quite importantly, in the event $275 makes an appearance, the share will have broken the uptrend since 2016.

Secondly, and very importantly, if $275 appears, it presents a "lower low" in the grand scheme of things, taking the share into territory where a long term logical bottom is down at $175.

Third (this one is obscure), the visuals indicate the share price has now real "history" at $275. This is the sort of thing, when if a share has previously hit a high (or a low) there will be ample reason to anticipate market activity when it next revisits such a level.

The best we've got is a couple of days in December 2017 when the price hit this level and basically did nothing interesting. We'd be hard pushed to invent a reason why this will prove important.

Collectively, the foregoing encompasses sufficient reason to distrust $275 if - and only if - it makes an appearance. Do remember, none of our criteria are yet present to justify such a dollop of misery for the future.

We suspect the circled area on the chart represents Boeing's most recent aircraft incident. It feels very like the market decided, "okay, let's start a new trend" at this point and thus, we've painted a blue line.

At present, Boeing requires better than $358 just to indicate the potential of a climbing cycle to $386. If we adhere to our demand for "higher highs", only above $365 does it actually become safe to believe in $386 as a future potential.

Secondary, if such a level exceeded, calculates at an improbable $429.

We deem this improbable as it takes the price above the circled area on the chart, carrying a subliminal suggestion all is okay again in Boeing's world.
 
For now, we're just not sure the market has figured out a plan for this aircraft maker as the share price is on a wing and a prayer (sorry, couldn't resist).

Source: Trends and Targets      Past performance is not a guide to future performance

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

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