Chart of the Day: Boeing Needs to Prove It’s Worthy
The stock continues to be distributed but is now hovering at a critical level.
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Last time we looked at Boeing (BA) the stock was flirting with a break of the key $200 level. Unfortunately, that spot did not hold. There is some time for rehabilitation but it needs to happen quickly.
Indicators like the MACD and stochastics are oversold and bearish, but that is not any reason to step in to buy just yet. We would like to see a bit better price action, at the very least some stability before getting excited about future moves up.
The last four sessions of distribution (higher volume to the downside) are reflected in the top chart (arrow). There is no dispute here that this is bearish, but we often see a very large volume print (like last week) indicate the last of the sellers are out and it is time for “strong hands” to step in. We could be at that point now but prefer to see a bit more time go by before making that determination. If true, buying at this current level is going to work.
Money flow remains bearish, and on balance volume (not shown) is weak. Many of the defense-related companies are down and out this fall, and most are washed out. Any good news is going to stoke a modest rally at the very least.
For now, we’ll watch and wait. Earnings in October could be a catalyst.
We like Boeing in TheStreet Pro Portfolio and rate it a Two, or “stockpile on pullbacks.”
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At the time of publication, TheStreet Pro Portfolio was long BA.
