The FAA approved the jet for commercial flights, which has been grounded for 20 months. The 737 MAX is now deemed safe to fly, a decision the FAA said it was “100% confident” about.
On the plus side, the stock is still up on the day, higher by about 2%. On the downside though, Boeing opening print of $223.02 also is its high on the day.
In other words, it’s been fading for most of the day, trying to find its footing.
Bulls are now looking for the stock to build on its recent momentum. That momentum has been present in the stock price, up almost 55% in the last 13 trading sessions, as well as in the headlines.
Let’s look at the chart to see where this one may be heading.
I had previously highlighted Boeing stock being stuck in a downward channel. Resistance kept squeezing the price lower, while support kept coming into play at lower and lower prices.
In late October – around when Boeing reported earnings – the stock made another lower low by taking out the September low.
But then shares reversed, drifting higher before jolting out of its downward channel. After consolidating around the 200-day moving average and between the $180 to $190 area, Boeing stock found another jolt of momentum.
This time the rally took shares over $200. Wednesday’s action sent Boeing north of $220, its highest level since June.
From here, let’s see if Boeing stock can retest those June highs up near $234. Above that and the shares could climb to $249. There it finds the gap-fill level from March, as well as the 61.8% retracement.
It will need to rest at some point, but above $250 and the $292 to $300 area could be in play. In that range, Boeing will also find the 78.6% retracement.
On the downside, I’d prefer to see the $200 level hold as support. However, should it fail, Boeing needs to hold this week’s low near $191. Otherwise it risks pulling back to the 200-day moving average.