Technical Analysis – Boeing stock tests key support near 2-month lows

Christina Parthenidou, XM Investment Research Desk

Boeing saw its stock price opening with a gap down on Monday, near one-month lows, and its 20-period moving average in the four-hour chart slipping below the 50-period MA after four months. The latter could be an indication that the market may potentially extend the downtrend started from the record high of 445.08 earlier this month.

Yet with the market currently testing a crucial resistance-turned-support level around the 50% Fibonacci of the upleg from 292.13 to 445.08 and the RSI fluctuating near its 30 oversold mark, chances for a price reversal are higher. Stochastics are embracing this view as well, as the indicator is currently pointing to the upside.

A failure to clear the 50% Fibonacci of 368.82, could send the stock near the 381.30 barrier before attention turns to the 38.2% Fibonacci of 386.88. A more aggressive rally, however, would target the 400 round level and resistance around 414, where the 50-period MA is currently placed.

On the flip side, if the market action moves below the 50% Fibonacci, then the area between 354 and 347 could be the next to halt bearish corrections. Under that zone, another wall could be found near 333.

In the bigger picture, Monday’s sell-off changed the outlook from bullish to neutral and now only a climb above 414 would cancel this shift.