Stay Away From Boeing? This Expert Is

Eagle Bay Capital founder and Market Technician JC Parets recently looked into the performance and prospects of Boeing Co (NYSE: BA) in his Dow 30 report.

The expert provides two charts and explains why he would stay away from this stock for now.

Weekly Chart

Structurally, after holding on to the key support around $118, Boeing “broke out beautifully above this downtrend line from the highs last year as we had hoped for,” Eagle Bay’s report explains. “The upward sloping 200-week moving average and momentum in a bullish range have also suggested that these breakouts were likely coming soon.” Another positive signal was provided by the simultaneous breakout of relative strength broke.

The firm wants to be long only above the downtrend lines from early last year, never below them. The next target stands above $160, representing the 161.8 percent Fibonacci extension from the (almost) year-long consolidation.

Daily Chart

Short-term Eagle Bay only wanted to buy Boeing above the downtrend line from the year-ago highs. The breakout took place “beautifully and prices ripped higher,” just as they hoped for. At that point they said they wanted to be buying weakness.

From a risk management standpoint, the firm suggested traders “move stops to be only long above the 3/13 lows, especially with momentum giving mixed signals hitting both overbought and oversold conditions since last summer. That broke and since then there has been no reason to be long.”

Now, momentum is hitting oversold conditions. This changes the dynamics of Boeing’s stock. “I would still stay away for now,” Parets concludes.