Boeing has been beaten down like its 737 Max8... But with easing regulations on its planes, people wanting to travel, and vaccines becoming more accessible - the airline industry is going to experience some BOOM.
THE TREND CASE:
ABCD Pattern:
On the bull run so far, BA has displayed a repetitive pattern climbing through different areas of support and resistance. Point A before a run up to point B at B, there is a downtrend and consolidation to point C before breaking the trend top resistance and running off to a new high at D. I'm expecting this same pullback to occur and pull the same retracement levels as before. We are now past A2, B2, C2, and D2, now looking to start the new ABCD3 wave.
Chaikin Money Flow has finally surpassed 0 (indicated by white heart) in nearly a year - money is flowing! Good upward trend, expect it to stay so
Fibonacci:
Looking at the large breakdown from February 2020 through a bottom in mid March 2020 in BA, we can extend a Fibonacci tool. What's interesting is where we see key breakouts and breakdowns occur within the ABCD pattern as fib levels as well. Looking at the first run from C to a high D - price begins the break down two Fibonacci levels (A high at D - 50% ran down to the A2 at 23.6% fib level). A2 -> B2 are both fib levels at 23.6% and 61.8% respectively
Though the past isn't a perfect indicator of the present - Setting that same setup again... That next run from B2 to C2 are key fib levels as well. But with this current run up to D2, I think we can expect a pullback to the 50% fib level (~$220) before we start to see the true bull run of BA
I have been following BA a lot more closely since its huge breakdown last year. The smaller pink drawings were when I was doing some pattern analysis at that time.
THE RETRACEMENT CASE:
The Regression:
The regression channel is a good indicator to show how BA's price has moved during this current bull trend. Falling or riding outside of the bands, these are considered extreme runs. Currently at indicated price D2 - we have reached the end of an ABCD run outside the regression line. That happens at point D before running down to the bottom of the trend line at point A.
RSI:
The daily has reached overbought. When the RSI reached near this level last was June 8th, 2020 and the next 4 days - BA ran down $52.78.
SPARK NOTES My analysis says we are going to see BA hit $350 by July this year. First, get ready for some consolidation, even a pullback to the 50% Fib level at $220.
Thank you for the detailed analysis. I can see your points, but I don’t think BA will retrace back to $220. There is just too much good news now; new orders, positive net orders, vaccines, stimulus, revenge spending to summer travel season, etc. when China certifies the MAX and BA gets a new order from China, its biggest market, the stock is going to fly! Previously a lot of people believed that the stock was going to retrace back to the $160 area when it broke below the $200 level in late January. But it bounced right off. So I think the consolidations and retracement are much shorter than they used to be. I think it’ll hold that $$240-245ish amount. Good luck!
Langutang
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@ktaba, Thanks for taking the time to share! $220 is a bit low and more of an opportunity to buy again lower. Definitely ready to take off