Technical Analysis – Boeing stock finds support at 50-day SMA after gap down
Boeing shares plunge after mid-air blowout incident
But negative momentum may already be waning
Can the stock stage a rebound?
Boeing stock tumbled by 8% on Monday on worries about how the business might be hit from the blowout of a window in a Boeing plane in mid-flight. The stock had already gone into correction at the end of December, slipping below its 20-day simple moving average (SMA). But Monday’s panic selloff appears to have been halted by the 50-day SMA in the 226.50 region.
The momentum indicators remain in bearish mode but the short-term picture is not entirely negative. Both the RSI and MACD continue to decline, though the former has yet to reach the 30 oversold level and the latter remains in positive territory. Meanwhile, the bullish crossover of the stochastic oscillator that had progressed before the gap down remains intact, suggesting that a near-term recovery cannot be ruled out.
If the stock bounces higher in the coming sessions, the main challenge for the bulls will be to reclaim the 243.00 zone, which encompasses the August 2023 peak as well as the recent low of January. Climbing above the 20-day SMA around 254.00 would put any rebound on a more solid footing. But for Boeing to resume its medium-term uptrend, the price would need to surpass the December 2023 high of 266.05.
However, if the selling pressure doesn’t ease and the price breaches the 50-day SMA, the price could go into freefall until the 200-day SMA at 213.70. Should this support fail as well, the 61.8% Fibonacci retracement of the October-December uptrend stands ready to provide some backup at 210.45.
In brief, the stock is more likely to suffer further losses than not in the near term, although a turnaround is also possible. A drop below the 50-day SMA would undermine the bullish structure in the medium term, while rising above the 20-day SMA would reinforce it.Related Assets
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