Flash Note: Boeing, A Long Term Technical Sell

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Summary: At $335.95, Boeing is a long term, technical SELL.

Over the last decade, Boeing Inc has been one of the strongest stocks in Dow 30, surging 8-fold as the US economy recovery and the government's defense spending increased. In addition, geopolitical tensions as well as a growing global economy were strong catalysts for earnings and revenue growth over the last number years.

As far as the stock price is concerned, the market appears to be discounting a perpetual high growth scenario, with the stock trading at all-time highs while earnings are also at a multi-year peak.



From a fundamental valuation perspective, the share trades at 19 x earnings, while EV/EBITDA is at 15.3x (declining from the recent highs which was in line with a level last seen in January 2010) while hedge fund ownership is starting to roll over, reflecting growing selling pressure.


In terms of the technical charting setup, the price trades at the overhead trend line resistance level going back to May 1990, while both the stochastic and RSI are rolling over from overbought levels.

In addition, the candle structure year-to-date reflects a tight range and a breakdown, as per the month chart. We also see (on the chart that follows this one) the price consolidating below it's 200-day moving average for the first time since September 2016 - a very significant technical development.

Boeing (Monthly)


 Boeing (Daily)



At $335.95, Boeing is a long term, technical SELL.


Update as at 16 March 2018

Levels: to cover this short: 

$57 & $28
https://www.tradingview.com/x/Bophi3m2/
 

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