Market News & Analysis
Boeing woes may not be over despite management change
Kelvin Wong December 24, 2019 2:29 PM
Medium-term technical outlook on Boeing (BA)
click to enlarge charts
Key Levels (1 to 3 months)
Intermediate resistance: 355.20
Pivot (key resistance): 391.00
Supports: 320.60, 296.60 & 264.50
Next resistance: 446.00
Directional Bias (1 to 3 months)
The share price of Boeing has rallied by 2.91% yesterday with the sudden resignation of CEO Dennis Muilenburg after four weeks of consecutive decline of 14% over the fallout from its 737 Max crisis and the recent failed space travel mission on its unmanned Starliner capsule. Safety lapses in the 737 Max model had led to fatal crashes in 2018 and 2019 and left Boeing in the centre of regulatory and public scrutiny. Chief Financial Officer Greg Smith will serve as interim CEO.
However, technical analysis on the share price of Boeing is not advocating for a bullish “Bottoming” phase at this juncture.
Bearish bias in any bounces below 391.00 key medium-term pivotal resistance and a break with a daily close below 320.60 reinforces the start of a potential multi-week corrective decline sequence to target the next supports at 296.60 and 264.50.
On the other hand, a clearance with a daily close above 391.00 invalidates the bearish scenario for a push up to retest the current all-time high level of 446.00.
- Since its 446.01 all-time high printed on 01 Mar 2019, Boeing has traced out a major bearish topping configuration, “Head & Shoulders” after a stellar up move of 335% from its Feb 2016 swing low of 102.10.
- The neckline support of “Head & Shoulders” rests at 320.60.
- In the medium-term, its price action has started to evolve within a descending channel from its 01 Mar 2019 all-time high area with its upper boundary now acting as a resistance at 355.20 (see daily chart).
- The daily RSI oscillator has just staged a rebound from its oversold region and still has room to manoeuvre to the upside before it reaches its overbought region. This observation suggests that price action may see a further bounce at this juncture towards the aforementioned descending channel resistance at 355.20.
- The 264.50 medium-term support is defined by the lower boundary of the descending channel and the 1.00 Fibonacci expansion of the decline from 01 Mar 2019 high to 15 Aug 2019 low projected from 25 Sep 2019 high.
Charts are from eSignal
From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.