Stock Of The Day: Will Boeing Prove An Old Wall Street Saying Is True?

Shares of The Boeing Company (NYSE:BA) were up by almost 6% Friday. But trading on Monday is quiet. The stock has stalled out at an important resistance level.

‘Sell at former peaks' is an old saying on Wall Street. Boeing may prove it to be true once again, like it did earlier this month. This is why we have made it our Stock of the Day.

As you can see on the chart below, back in early 2024 Boeing spent a lot of time trading around $215. It was a resistance level. The sellers put a top on it, and then eventually drove it lower. When this happened, a number of traders and investors who bought shares around $215 decided that their decision to do so was a mistake.

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Some vowed to hold onto their losing positions. But they also decided that if they could ever do so, they would sell their shares at the same price they paid for them. This would allow them to exit their positions at breakeven.

Because of this, when the stock finally rallied back to $215 earlier this month these traders and investors came into the market as sellers. The large group of orders they placed caused there to be resistance around $215 again.

After the stock sold off of this level for a second time, a similar dynamic occurred.

Some of the people who bought around $215 developed buyer’s remorse when the price dropped. They also decided to sell if the price returned to their buy price. Now that Boeing has returned to this level, these traders have started to sell.

The large concentration of these sell orders has created resistance again.

‘Sell at former peaks' is a saying based upon the idea that when a stock returns to a price or a level that had previously been a peak or resistance, there is a good chance it hits resistance there again. There's also a good chance a selloff follows.

Shares of Boeing may be about to head lower.

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