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Buy or Sell Boeing? There Are Pros and Cons

Boeing stock is rallying nicely on positive news out of China, but is struggling against the backdrop of a new COVID variant.

Shares of Boeing  (BA) - Get Boeing Company Report are up more than 5% so far on the day, but that’s not offering much consolation for investors.

The stock fell 4.9% on Wednesday and closed just off the session low. It was the fourth straight daily decline for the stock and one that took Boeing to new 2021 lows.

Previously, that low was at $191.85 in January.

Today’s gains come on reports that Chinese authorities are ready to put the 737 MAX jet back into action.

Of course, the obvious pain in the recent few days has come on worries of the Omicron variant.

That dealt a blow to airline stocks and it’s no surprise as to why. United Airlines  (UAL) - Get United Airlines Holdings, Inc. Report, Delta Air Lines  (DAL) - Get Delta Air Lines, Inc. Report and others all fell hard. 

Analysts have been getting bullish on the stock, as catalysts start to build up. However, a dent in the travel industry could hurt Boeing.

Just earlier this month, the stock looked like it was ready to break out. Now, it’s trying not to break down.

Trading Boeing Stock

Daily chart of Boeing stock.

Daily chart of Boeing stock.

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Boeing has been finding the declining 21-month moving average as support since March.

Near that measure now, the stock is struggling to reclaim it, as it chops below the declining 10-day moving average.

For active traders, Boeing stock will need to reclaim both of these measures, along with $200, in order to be a viable long candidate in the short term.

If Boeing stock can do that and clear $204.50, we could see a squeeze up to the 21-day and 50-day moving averages.

It would likely take some time — especially with worries over the new variant in play — but a move over the 50-day moving average could put a run all the way up to the 200-day near $230.

Keep in mind, the $230 to $232 area has been resistance for two months now, as that’s where the October and November highs come into play.

On the downside, I would turn cautious on a move back below $191.85.

The stock was careful not to breach that level over the past week, until Wednesday’s action thrust it below this mark.

Losing the new 52-week low at $188 — and worse, closing below it — could set up Boeing for more losses.

While bulls are hopeful that the 737 MAX can return to flight in China, the broader view of Covid and the new omicron variant may take precedence, especially if Boeing’s customers start seeing a slowdown.