Boeing (BA) is the top-performing component of the Dow Jones Industrial Average so far in 2010. That's a welcome change from last year, when Seattle's aerospace giant lagged the venerable index and broad market, thanks to slow progress in the development and rollout of its state-of-the-art 787 Dreamliner.

Of course, shock waves from the 2008 crash still rattle the stock, because it relies on healthy nations and air carriers to buy its expensive product line. That's a tough chore in 2010, despite the economic recovery, with potential buyers delaying purchases of big-ticket items and revitalizing airplanes that are 20, 30 and even 40 years old.

However, the world needs to upgrade civilian and military fleets sooner or later, and Boeing will finally fill up its parched order books. Since the market is a future discounting mechanism, the current uptrend already reflects a piece of this upcoming growth. This raises the primary question of this column: Is it already too late for RealMoney readers to buy the stock?

Boeing (BA) -- Monthly
Source: eSignal

It's amazing to see a 20-year old price level that's still in play, but that's exactly what's happening on Boeing's monthly chart. The stock jumped to a major high near $30 in 1990 and finally mounted that resistance five years later. Although the stock has enjoyed strong uptrends in the last 15 years, the declines have been equally brutal, dropping back down to the old breakout level (red circles) in 1998, 1999, 2001, 2003 and 2008.

This is a feast-or-famine pattern, in which investors can strike it rich capturing the uptrends and then lose every penny trying to hold on through a downtrend. Saying it another way, this chart is a perfect argument for market-timing, in which profits are taken aggressively when the uptrend turns and heads in the opposite direction.

With that mind, the current location of advancing price demands caution. The stock has returned to the same levels that triggered downturns in 1997 and 2000. In addition, the rally has now struck the top of the monthly Bollinger Bands (green circle), which has been curling lower since the start of 2009. This tells us that opportunity cost is not favorable to long positions at this time.

Boeing (BA) -- Weekly
Source: eSignal

Boeing dropped from $108 to $29 during the credit-driven bear market and bottomed out in March 2009. The subsequent uptrend has now retraced about 50% of the prior decline, which is a natural resistance level. The angle of the uptrend, however, is quite impressive, suggesting that momentum could easily carry this stock higher into the second quarter.

Look at the two lows (red line) that were broken in the 2008 decline. They're situated close to the 62% retracement around $77. That price level looks like a natural target for the end of the current uptrend. That isn't a problem for a long-side position trader, with the stock sitting 8 points under that level, but the reward-to-risk profile is clearly unfavorable for new investors.

I suspect a better buying opportunity will come down the road, after the stock turns south and drops into support at the 200-week moving average, currently around $61. A long position taken near that price level later this year could benefit from a renewed uptrend, at the same time that economic indicators support a faster-growing world economy.

Boeing (BA) -- Daily
Source: eSignal

Boeing shows three distinct rally waves off the October 2009 low near $47. The first and second waves are nearly identical in size, with both upticks posting about 10-point gains. The third rally wave, starting in early February, has already posted a 13-point gain. This extension suggests the uptrend is living on borrowed time.

In addition, the current rally wave shows no pullbacks in the last 7 points. This also points to an overheated trend, just like the broad market since February. Paradoxically, a sudden downdraft would help to sustain the rally because it would relieve the overbought technicals, shake out weak hands and drop price down to stronger support levels.

I suspect that Boeing is getting close to that type of stomach-churning shakeout event. Of course, a steep decline will be great news if you want to own the stock for the long term, because it will set up much better entry points. In the meantime, I recommend that you just sit on your hands and ignore the bullish chatter on this market leader.

Alan Farley provides daily stock picks and commentary with his "Daily Swing Trade" newsletter.

At the time of publication, Farley had no positions in stocks mentioned, although holdings can change at any time.

Alan Farley is a private trader and publisher of Hard Right Edge, a comprehensive resource for trader education, technical analysis, and short-term trading techniques. He is also the author of The Daily Swing Trade, a premium product from TheStreet.com that outlines his charts and analysis. Farley has also been featured in Barron's, SmartMoney, Tech Week, Active Trader, MoneyCentral, Technical Investor, Bridge Trader and Online Investor. He has written two books: The Master Swing Trader and The Master Swing Trader Toolkit: The Market Survival Guide, due out in April. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks.

Farley appreciates your feedback; click here to send him an email. Also, click here to sign up for Farley's premium subscription product, The Daily Swing Trade, brought to you exclusively by TheStreet.com.

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