Featured Trade (US Stock): Boeing at risk of shaping a potential major bearish reversal

An impending potential major bearish reversal in store for Boeing.

Medium-term technical outlook (1-3 weeks) on Boeing (BA)



Key technical elements

  • Boeing (BA), the top component stock in the Dow Jones Industrial Average (DJIA) with a weightage of around 9% has started to show signs of bullish exhaustion since its current all-time high level of 374.48 printed on 07 Jun 2018. In terms of price action, it has traced out a major bearish reversal “Triple Top” configuration in place since late Feb 2018 with a corresponding neckline support at 311.17. (refer to daily chart)
  • The weekly RSI oscillator (a momentum indicator) has triggered a bearish signal through the breakdown of a significant corresponding support at the 57 level with a prior bearish divergence.
  • The next medium-term support to watch will be at 270.40/266.90 which is defined by the primary ascending trendline from 19 Sep 2016 low and the 38.2% Fibonacci retracement of the melt-up phase from 11 Feb 2016 low to the current all-time high level of 374.48 printed on 07 Jun 2018.

Key Levels (1 to 3 weeks)

Intermediate resistance: 354.45

Pivot (key resistance): 374.48

Supports: 311.17 & 270.40/266.90

Next resistance: 441.55

Conclusion

Therefore, as long as the 374.48 key medium-term pivotal resistance is not surpassed, Boeing may see a further push down to test the 311.17 neckline support of the impending major “Triple Top” bearish reversal configuration. A daily close below 311.17 is likely to open up scope for a potential multi-month corrective down move to target the next support at 206.15.

On the other hand, a clearance above 374.48 invalidates the bearish scenario for a continuation of the melt-up move towards 441.55 (Fibonacci projection cluster).

Charts are from eSignal



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