Boeing stock price analysis: the price could go higher in December

Vaccine boosts the plane manufacturer's stock

Boeing shares have rebounded and are poised to trend higher, as news of a coronavirus vaccine has buoyed value shares. The aerospace company has been in a slump following two plane crashes which put its new offering, the 737 Max, on the sidelines. Just as Boeing is nearing approval to return the 737 Max to the sky, the company has to deal with the fallout of the pandemic. 

Boeing stock performance generally experiences mixed results in December. Despite this backdrop, the impetus of a vaccine has generated momentum in the company helping to generate positive technical momentum.

Boeing faces multiple issues

The Boeing 737 Max, the newest plane manufactured by Boeing, is nearing clearance to fly again after a 20-month ban. Yesterday the company was given permission but the planes still need re-equipment and pilots need to be trained. 

The grounding of the plane was driven by two crashes that sent the company into crisis. The timing of the pandemic led to several order cancellations. During the first 10 months of 2020, Boeing lost 393 aircraft orders. Chief rival Airbus won 308 net new orders for aircraft in that period. However, Federal Aviation Administration is now at the end of its review of the plane, which could allow Boeing to return the 737 Max to the sky. It also appears that there are potential buyers of the Boeing 737 Max. Southwest Airlines said they are in talks with Boeing and are poised to jump on deals. 

The seasonals are positive

Boeing shares generally experience mixed results in December. Over the past 10 years, the company has increased 60 per cent of the time but the average return is flat. The returns were very similar over the past 20 years. This compares to robust November returns. During the past 10 years, Boeing has increased 70 per cent of the time in November, for an average gain of 3.3 per cent

Boeing stock technical analysis

Boeing has run up 28 per cent since Pfizer announced its vaccine results. The share price is hitting resistance near the 50-week moving average at $202. A close above this level would lead to a test of a downward-sloping trend line that comes in near $265. Support is seen near the 10-week moving average at $167. 

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Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 73, below the overbought trigger level of 80. Medium-term momentum has turned positive as the moving average convergence divergence  (MACD) index generated a crossover buy signal. This occurs as the MACD line (the 12-week moving average minus the 26-week moving average) has recently crossed above the MACD signal line. The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Boeing shares: how to trade

Boeing has experienced a rough ride. After having its 737 Max plane grounded following  two crashes, the company returns to a recession triggered by a pandemic. The stock prices have been given a boost following the results of the Pfizer and Moderna vaccines, as the markets can see a future where people’s lives are back to normal. The technicals are positive and prices are poised to move higher. Look for Boeing to continue to rally in December.

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Boeing
Daily change
186.08
Low: 180.86
High: 188.09
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