Boeing Dropping Into a Low-Risk Buy Zone

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.

Click to see BA Chart


This article is commentary by an independent contributor. At the time of publication, the author held was long on Boeing.

If you liked this article you might like

General Electric Is One Mega-Cap Stock You Must Still Avoid

General Electric Is One Mega-Cap Stock You Must Still Avoid

Dow Jumps Over 300 Points, Posting Its Fifth Straight Day of Gains

Dow Jumps Over 300 Points, Posting Its Fifth Straight Day of Gains

Delta, Boeing on the Verge of Burying the Hatchet

Delta, Boeing on the Verge of Burying the Hatchet

How I'm Playing Infrastructure, Oil and Defense Stocks Right Now

How I'm Playing Infrastructure, Oil and Defense Stocks Right Now

Jim Cramer: Get Ready for the Analysts to Come Out of Their Foxholes

Jim Cramer: Get Ready for the Analysts to Come Out of Their Foxholes