Year to date, Boeing is up more than 38% on a total returns basis, nearly quadrupling the performance of the rest of the Dow over that same time frame. Cue the high-flyer puns.
The stock is on fire. But if you think you've missed out on Boeing's massive rally this year, think again. It's not too late to establish a position in Boeing this summer. In fact, Boeing is sending a brand new technical buy signal ahead of earnings. To figure out where Boeing is heading from here, we're turning to the charts for a technical look.
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First, though, it's worth taking a closer look at Boeing's upcoming second-quarter earnings call next week.
On average, Wall Street analysts expect Boeing to report earnings of $2.31 per share for Q2 -- and, if history is any indication, it's one that Boeing is likely to hit. That's because Boeing has exceeded every earnings consensus since 2011, except for one single slight miss at the start of last year. That's a significant track record of earnings beats, and it's likely a major factor in Boeing's massive momentum surge.
Simply put, Wall Street is forecasting a big year for Boeing, and it recognizes that this stock consistently smashes forecasts.
But, in the immediate-term, it all comes down to the technical trajectory. Here's Boeing's chart:
Boeing's price action hasn't just been pointing up and to the right; it's also been very orderly. Shares have been bouncing their way higher in a well-defined uptrending channel since last fall, catching a bid on every test of trendline support over the course of that price channel.
While a bear trap back in May temporarily dipped Boeing's shares below support, Boeing quickly regained its footing, and re-entered the price channel, adding some extra validation to the strength of the uptrend.
Boeing bounced off of trendline support for the ninth time at the beginning of July, signaling another buying opportunity for this aerospace giant. Since then, shares have been steadily ascending their price channel. In short, that bounce makes now a solid time to buy shares of Boeing.
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Actually waiting for that bounce is important for two key reasons: It's the spot where shares have the most room to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before the channel breaks, invalidating the upside trade). Remember, all trend lines do eventually break, but by waiting for the bounce to happen first, you're ensuring Boeing can still catch a bid along that line before you put your money on shares.
If you decide to pull the trigger on Boeing here, it makes sense to park a stop on the other side of this stock's prior low at $195.
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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.