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Boeing Rips Higher - It's in a Full-Blown Breakout

Boeing shares are ripping to their highest level in several quarters. The stock is now in a full-blown breakout.

Boeing  (BA)  shares were ripping higher on Friday, up 6%. The stock continues to ride a wave of momentum, now up more than 20% this week.

On the one hand, the reopening trade is alive and well. Airline stocks like Southwest Airlines  (LUV)  and cruise stocks like Royal Caribbean  (RCL)  continue to push higher as vaccinations increase and the U.S. inches toward fully reopening.

On the other hand, Boeing is looking to bury a horrendous year and get its business back on track.

That starts with getting its new orders to surpass cancellations, something it did in February for the first time in 15 months.

Then a 737 MAX deal with Southwest put investors in a good mood a few days ago. Another order for 24 737-8 Jets on Friday is the inspiration for Friday’s rally.

Riding hot off General Electric’s  (GE)  deal with AerCap, Boeing stock is back.

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Trading Boeing

Daily chart of Boeing stock.

Daily chart of Boeing stock.

The stock market is a forward-looking mechanism. It doesn’t necessarily care what the company did, it cares about what it will do.

In the case of Boeing, a bad year is in the past and now we’re looking forward. New orders and stability in the airline space has it back on track and the stock is trading like it.

A few weeks ago, Boeing looked like it was ready to rally, but broader market volatility sapped its momentum (purple arrow) as shares chopped sideways until this week.

With five straight daily rallies now, the stock has pushed through several notable marks. That includes the December high near $244, as well as the 61.8% retracement and the big gap-fill near $250.

Shares are even pushing through the 100-week moving average.

Now bulls’ attention has to be shifting higher, with the 200-week moving average and 78.6% retracement technically in play.

On the downside, I would love to see support come into play between $244 and $250. If that’s the case, the 10-day moving average may continue to guide Boeing higher and give investors a buy-the-dip opportunity.

For now, Boeing is a full-on breakout. The question is how long its momentum will last.