Boeing stock price analysis: the stock may start a new uptrend within the next month

Boeing is currently in a basing formation and a break above $244 could start a new uptrend

Boeing has been in trouble for the past two years after its 737 Max jet was grounded following two crashes in five months. Additionally, the coronavirus pandemic dealt another severe blow to the airline industry, as countries closed borders and air traffic came to a standstill.

However, in the past few months, the launch of new coronavirus vaccines has brought a ray of hope that people will start travelling again and that may result in new orders to the aircraft manufacturers.

And the orders seem to have started flowing. State-owned Saudi Arabian Airlines (Saudia) plans to buy 70 aircraft from Airbus and Boeing. Ryanair booked 75 Boeing planes and Alaskan Air plans to buy 23 737 Max jets.

So, with the fundamentals improving gradually, can the Boeing stock price trend enter a bullish phase? Let’s analyse the weekly and daily chart to find out.

Boeing Stock Technical Analysis - Weekly Chart

The Boeing stock price analysis shows that it has been a huge underperformer in the past year as it has not been able to recover to its pre-Covid levels. However, the stock has formed a large ascending triangle, which is a bullish pattern.

This setup will complete on a breakout and close above $244. If the bulls can sustain the price above this resistance, the stock could start a new uptrend. The pattern target of this setup is $400.

However, the bears are unlikely to give up easily. They are aggressively defending the $244 overhead resistance as seen from the long wick on this week and the previous week’s candlestick.

If the bears sink the price below the 20-week EMA, the stock could drop to the trendline of the triangle. The bulls are likely to buy this dip and attempt a breakout once again. 

Contrary to this assumption, if the bears sink the price below the triangle, it will invalidate the pattern and that could pull the price down to $141.

While the moving averages are flat, the relative strength index (RSI) has risen above 57, which suggests that bulls are attempting to make a comeback.

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Boeing Stock Technical Analysis - Daily Chart

The daily chart shows that both moving averages are flat and the RSI is close to the midpoint, indicating a balance between supply and demand.

This balance will shift in favour of the bulls if they can push and sustain the price above $244. Such a move will suggest that the demand exceeds supply and that could result in a new uptrend.

Contrary to this assumption, if the price dips below the moving averages, the stock could drop to the trendline of the triangle. A break below this support could signal that bears have overpowered the bulls. Such a move could result in long liquidation and delay the possible start of the uptrend.

Is Boeing a buy or a sell at these levels?

The Boeing stock price trend will turn bullish on a close above $244. If that happens, traders may buy 50 per cent of the desired allocation by keeping a suitable stop-loss.

Generally, the breakout from a bullish pattern is followed by a retest of the breakout level. A successful retest confirms the breakout is valid and it also offers an opportunity to traders to add to their positions. Traders may consider buying the remaining 50 per cent of the position after the successful retest of $244.

On the contrary, if the stock breaks below the triangle, it will suggest weakness. If that happens, traders could avoid bottom fishing and wait for the price to form a new bullish setup before buying.

Trade Boeing - BA shares price

Daily change
Low: 200.4
High: 203.96

FURTHER READING: AstraZeneca stock forecast: will the vaccine give it a boost?

FURTHER READING: How to find good stocks

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