Boeing Co (NYSE: BA) seems to be poised for a price surge as per its latest charts. The company designs, develops, manufactures, sales, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems, and services worldwide.
The stock was also a part of our recent watchlist for breakout stocks.
#1 Double Bottom Pattern Breakout: As you can see from the daily chart below, the stock had recently broken out of a double bottom pattern. This is marked in purple color. A double bottom pattern is a bullish reversal pattern, and a breakout from it indicates that the stock could move upwards.
#2 Price above MAs: The price is currently above the short-term moving average of 50-day SMA as well as the longer-term moving average of 200-day SMA, indicating that the bulls are still in control. This is a positive indication.
#3 Bullish ADX: The ADX indicator shows that the +DI line is currently above the –DI line and the ADX line has currently moved up from below the –DI and +DI lines. This indicates possible bullishness.
#4 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the daily chart. This indicates possible bullishness.
#5 Symmetrical Triangle Pattern Breakout: The weekly chart shows that the stock had recently broken out a Symmetrical Triangle pattern. This is a continuation pattern and is characterized by two converging trend lines connecting a series of sequential peaks and troughs. This pattern is marked on the chart as pink color lines. The breakout from a symmetrical triangle pattern usually signifies a bullish move. The stock is also trading above its 50-week SMA, indicating that the bulls are gaining control.
#6 Bullish MACD: The MACD line is above the MACD signal line in the weekly chart indicating bullishness.
#7 Bullish ADX and DI: In the weekly chart as well, the ADX indicator shows bullishness as the +DI line is currently above the –DI line and the ADX line has started to move up from below the –DI and +DI lines.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of BA above the price of around $186.60.
TP: Our target prices are $195 and $201 in the next 3-6 months.
SL: To limit risk, place stop-loss at $182. Note that the stop-loss is on a closing basis.
Our target potential upside is 5% to 8% in the next 3 to 6 months.
For a risk of $4.60, our target rewards are $8.40 and $14.40. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 3x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the breakout level of the double bottom pattern with a high volume. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.