Market News & Analysis


Top Story

Boeing woes may not be over despite management change

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.

Key elements

  • 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 


Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.