Why To Stay Away From Boeing, In 2 Charts

In Eagle Bay’s most recent Dow 30 report, Founder and Market Technician JC Parets looked into the movement of Boeing Co BA.

Weekly Chart

After holding on to the main support level near $118, Boeing “broke out beautifully above this downtrend line from the highs last year as we had hoped for,” the firm’s report said. The upward trending 200-week moving average and “momentum in a bullish range have also suggested that these breakouts were likely coming soon.”

On top of this, relative strength broke out simultaneously - something the firm loves to see. They say they can still be long this name, but only above these downtrend lines from early 2014 and see no reason to be involved below them.

Eagle Bay’s next target is above $160, which represents the 161.8 percent Fibonacci extension from the aforementioned, almost year-long, consolidation.

Daily Chart

Short term, the firm only wanted to buy Boeing stock above the downtrend line from the highs of last year.

“We got that breakout beautifully and prices ripped higher just as we hoped for. At this point we want to continue to be buying any and all weakness,” the report explains.

From a risk management perspective, Parets suggested “traders move stops to be only long above the 3/13 lows, especially with momentum giving mixed signals hitting both overbought and oversold conditions since last summer.”

Since that broke “there has been no reason to be long,” the expert said. “Now that momentum is hitting oversold conditions it changes the dynamics of this stock,” he adds, concluding that he would still stay away for now.