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A Look At Boeing

08/23/17 03:59:08 PM
by Koos van der Merwe

The share price of Boeing rose nearly 10% to a record high on Wednesday, July 26.

Security:   BA
Position:   Sell

Boeing recorded a net profit of $1.76 billion on earnings during the second quarter. During the same period a year ago, the company showed a loss of $234 million. Reading news about the company, and what its plans are for the future is a must, however charts are looking troublesome.

Figure 1. Monthly chart with Elliott wave count and Gann fan.
Graphic provided by: AdvancedGET.
The chart in Figure 1 is a monthly chart with an Elliott wave count suggesting that the share price is completing a major WAVE 5. With a Gann fan drawn from May 1982, and the share price breaking above the 1x1 fan line and with volume dropping and the RSI indicator at overbought levels, a correction could occur in the near future.

Figure 2. Daily chart suggesting a wave 4 correction.
Graphic provided by: AdvancedGET.
The chart in Figure 2 is a daily chart with an Elliott wave count suggesting that the share price is in a WAVE 3, and could fall in a WAVE 4 to either 215.13 or 198.63. Once this correction is complete, the share could rise in a WAVE 5 to 286.35. The RSI indicator is at overbought levels and could in the very near future give a sell signal with the share price dropping in a WAVE 4. The PTI (Probability Index) is 80, which is a high number suggesting that that possibility of a fall followed by a rise in WAVE 5 to 286.35 in the near future is very certain.

The share price of Boeing has been very strong over the past years. A correction is on the cards, a certainty suggested by the daily chart of Figure 2. Waiting for that correction to occur is therefore a must before buying the share.

Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.

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