Boeing Stock Faces Critical Technical Test After Earnings Report

Boeing is eking out a higher stock price despite worse-than-expected earnings. But the stock still faces a critical test. Here's the must-know level.
Author:
Publish date:

Boeing (BA) - Get Report shares are putting up a strong front, rising a bit after the Chicago aerospace giant reported a worse-than-expected quarterly result.

Investors who are evaluating Boeing must be presuming that the worst is now behind the company.

While the investing ride may well be turbulent, with the 737 MAX news likely to dominate the headlines, investors are hoping it won’t get worse than this quarterly result.

The company reported a fourth-quarter loss of $2.33 a share, missing estimates by 50 cents. Revenue of $17.91 billion dropped more than 36% from a year earlier and missed expectations by $3.85 billion.

Further, management expects the 737 MAX matter to cost more than $18.6 billion. The results drove Boeing to report an annual loss for the first time in more than 20 years. Plain and simple, this was a horrendous quarter. 

Trading Boeing Stock

Chart courtesy of Stockcharts.com

Weekly chart of Boeing stock. 

While investors may be willing to think the worst is behind Boeing, the chart doesn’t reflect that optimism.

Multiyear range support was at $320. Boeing last week broke below that level to a low of $302.72 - but impressively reclaimed it by the end of the week. The shares opened the week below this level and are now struggling to reclaim it again.

For the bulls to create any sort of momentum, BA stock needs to reclaim the $320 mark. If they can do that, the next must-reclaim level is the 10-week moving average, currently at $333. 

If Boeing can hurdle both of these levels, the bulls will have the wind at their backs and could send the shares all the way to downtrend resistance (the blue line), currently near $360 and falling.

If Boeing shares can’t reclaim $320 - or they do so and fail to hold it as support - the 150-week moving average is on the table. Below that mark and this month’s low at $302.72 is possible.

If Boeing stock falls below that mark, the slope gets slippery. Specifically, the $285-to-$290 range would be on the table, followed by a test of the 200-week moving average, currently at $267 and rising.

Bottom line: It all hinges on $320. Above it and the bulls have a chance to make a stand and reclaim the 10-week moving average to gain even more momentum. 

Below it and the bears have a chance to retest the January lows and possibly crack $300.