While the Nasdaq and the SPDR S&P 500 SPY are running in blue skies, the Dow Jones Industrial Average has struggled to trade back toward its May 10 all-time high of 35,091.
Boeing Co BA, which makes up 4.47% of the Dow, has struggled to gain the traction needed for a lift-off back to its pre-pandemic levels and is being held down by the overall index.
Air traffic is increasing, however, and as global vaccination efforts ramp up and as airlines return to the skies demand for Boeing’s planes could increase. It's possible airlines could see more passengers than before the pandemic due to pent-up demand.
On July 2, the TSA reported 2.19 million people passed through airport security checkpoints — slightly higher than the 2.18 million people who passed through a checkpoint on the same date in 2019.
The Boeing Chart: On March 15, Boeing attempted to break back up toward its March 2020 pre-pandemic price of about $280 but failed and rejected off the $278.57 mark. Since then, Boeing’s stock has been in a long period of consolidation.
In its consolidation Boeing has settled into a triangle pattern and on Tuesday was sitting near the bottom upward sloping trendline and holding support at $232.70. With the apex of the triangle aligning with Aug. 6, both bulls and bears expect Boeing to break up above the triangle or down below it before that date.
Boeing is trading below both the eight-day and 21-day exponential moving averages (EMAs) with the eight-day EMA trending slightly below the 21-day EMA, both of which are bearish signs for the short-term. Boeing is also trading below the 200-day simple moving average, which indicates overall sentiment in the stock is bearish.
It can be noted that Boeing is trading less than 5% away from all the moving averages so it would not take much for it to regain support of all three.
Bulls want to see Boeing continue to hold support at the bottom of the triangle and for the stock to make its way back up toward the top of the range. If Boeing can regain the $244 level as support, bullish volume could help the stock make a break north.
Bears want to see bearish volume come in and break Boeing down bearishly from the triangle. If Boeing were to lose support at the $232 level it could revisit $223 before potentially bouncing.
BA Price Action: Boeing traded around $237.22 at publication time.
Photo: pjs2005 from Hampshire
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