Boeing (NYSE 🙂 fired Dennis Muilenburg, Chief Executive Officer, in an attempt to save the wreck from his reputation after two fatal crashes of his 747 MAX plane in just 14 months, killing 340 people.
However, concerns remain that the company continues to put profits above safety after David Calhoun, 10-year board member, has been appointed as CEO and president. Families of the accident victims call on the company to carry out a total makeover, with new ideas and new ideas for operational management.
With Boeing's stock fallen by more than 20% since the MAX was grounded after the Ethiopian plane accident on March 10, can the Muilenburg expeller turn the price around? Despite the initial increase in shares after the announcement, we bet it won't.
The share jumped 2.9% immediately after the news. However, it found resistance to the December congestion. If this one measure succeeded, there would have been a much more dramatic leap. If the stock now returns to the $ 332 area, it would trade according to a rising flag, bearish after the 8.25% drop in the two days of December 13 and 16.
The pattern suggests that the increase is due to profit taking after the sudden decline, as investors catch their breath and measure the market. The congested upward increase indicates that the supply is being absorbed, indicating that bears are still in charge. A negative outburst indicates another leg down, showing that sellers were enthusiastic enough to sell at lower prices to find new buyers, after drowning out the demand within the flag.
But that's not all. A downward breakthrough would require a goal similar to the previous move, the decrease of 8.25%. If that continues, the prize would complete a different, much more important pattern.
Boeing weekly price chart
The stock has been trading since February 2018 within a huge H&S top pattern, which may have been introduced after the first crash in October 2018.
The price is already under 50 and 100 WMA. If the price falls below $ 320, this would mean a reversal. As with the flag, desperate sellers would be willing to lower their asking price to find new buyers. If they do not find them, they continue to lower their prices. This would cause panic and encourage other sellers to sell. And just to reach the 200 DMA means a $ 50 drop, which is a long way down.
Trade Strategies
Conservative traders would wait for a closing of less than $ 311, to establish a 3% filter, to remove a bear trap, before moving into a short position.
Moderate traders can wait for the completion of the flag, including a price that closes under the continuation pattern for a few days and then returns to retest the resistance of the flag.
Aggressive traders can now go short, provided they understand the risk of a lack of confirmation for the pattern and have planned entrances and exits that they adhere to and that offer a workable risk-return ratio.
Trade sample
Admission: $ 340
Stop loss: $ 341, the whole number is higher than yesterday
Risk: $ 1
Target: $ 337, possible support for flag bottom
Reward: $ 3
Risk: reward ratio: 1: 3
