NEW YORK (TheStreet) -- After giving back nearly all of its initial June rally on Thursday, Boeing (BA) could soon present a buying opportunity for patient bulls.
The stock fell just over 1.8% to close at $141.19 and is back down near its May/June lows. If this downside momentum continues in the near term, Boeing will enter a very low-risk buy zone. The top layer of this major support area is $138.50, and the bottom layer is $136. Boeing bulls should take advantage of a dip into this area.
Boeing may finally be able to base once this support zone comes into play. Since the February spike high near $159, the stock has been in a steady drift lower. As we enter June, Boeing is working on its fourth straight lower monthly high and is 12% below the 2015 peak. While the trend remains lower, selling pressure is beginning to ease. This trend should continue as last summer's high of $138.40 nears. Just below this level is the stock's upward-sloping 200-day moving average at $137.25, right in the middle of the support zone. Last year's fourth-quarter high of $135.80 marks the lower layer of the zone.
If Boeing can build a solid base in this support area, a significant rebound could develop. A failure to hold here would indicate more downside will be needed before investors are ready to commit to the long side.
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