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Can Boeing Gain Altitude or Does It Need to Land? Here’s What the Charts Say

Boeing is struggling to rally on good news, which is never really a good sign. Here's what the charts say about the stock now.

Boeing  (BA) - Get Report started off the day with a pop, but we’ve since seen the stock fall back toward flat during Tuesday's session.

Initially driving the optimism on Tuesday was the U.S. and EU looking to come together to end a 17-year dispute over aircraft subsidies.

In fact, the gains in Boeing had the Dow futures looking pretty good Tuesday morning too.

However, the stock has not been able to hold onto its gains (neither have the futures). We saw Boeing also fizzle out last Friday despite reports that the company was shrinking its inventory of 737 MAX jets as demand rises.

Investors sold the stock on news of a big order from United Airlines  (UAL) - Get Report too.

While Boeing stock has done a great job rallying from the lows and has been inching its way higher, it’s very much been a two-steps-forward-one-step-back type of trade.

Will it find its footing soon and begin to gain altitude or does this stock need to land and refuel?

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Trading Boeing

Daily chart of Boeing stock.

Daily chart of Boeing stock.

As you can see with the weekly chart above, Boeing suffered a brutal decline. Shares were already out of favor due to issues with its 737 MAX aircraft, but then the COVID-19 pandemic really hammered the stock.

However, it’s been a slow and methodical rise from the lows ever since.

Amid that rebound, shares struggled with the 38.2% retracement, then eventually reclaimed this level as it turned to support. Same with the 50% retracement.

Now battling the 61.8% retracement, bulls want to see Boeing eventually reclaim this level too. The hope was that the recent bout of good news in combination with a recovery in airline traffic would be enough to spur the stock higher.

That hasn't been the case, though.

So far, Boeing stock has struggled with $250. If it can clear this level, let’s see it can also clear $260. If it can, that opens up the recent high near $278.50. Above that and the 200-week moving average and 78.6% retracement are on the table.

On the downside, let’s see if the 10-week and 21-week moving averages act as support. If they do, the 61.8% retracement remains in play. If they don’t act as support, we may need to see Boeing test down into the 10-month moving average and potentially, the $220 area.