BA: Short vs Long? Expectations for next week Don't be too quick to short this.
While the chart may look bearish, BA is hands down gaining momentum and interest. There are some telling signs here that I will briefly go over but let's recap:
Recap:
- BA rallied on news last week, gaining roughly over 8% in 1 day and making an attempt to break out of the weekly trading range (the green box with a cap of around 148).
- BA rejected being out of its trading range (this was my swing short this week, shorting its break down back into the trading range) and came tumbling back into range only to make another running attempt to break out, but again, being met with rejection.
Likely Trajectory for BA:
I am NOT overly short biased here. Chart does seem kind of bearish at first glance but I am not convinced. And here is why:
- BA ran up roughly over 8% on a good news day, to give roughly 4% of those gains back the next day and then climb AND CLOSE, and I repeat AND CLOSE, regaining 4% the following day. This is not the behavior of a bearish stock, imo.
- BA has seen massive rejection of the lower 110s. I was a little greedy, hoping for a touch in 94 where I could literally buy hundreds of BA shares and just live my life happy until retirement. Alas, this never came. And so people seem to be catching on that maybe this pipe dream of BA in the double digits may not be realized and are scaling back into their buy and hold positions (not to say that BA won't see the double digits, I just think that right now I am seeing a lot of both traders and investors stepping in. You can see it in the chart.)
- Lot of interest in BA 160 calls. My view of option data is meh, but its just an interesting number to see.
- BA attempted to break down from diamond top only to get immediately rejected and bought back up.
Next Week Range:
(Displayed in Red Box)
Next week range has seen bullish divergence. If this were SPY I would say that means SHORT! LOL! But who knows what it means with BA; anyway, next week range:
131 - 159
Just based on the projections for next week, a HARD BUY area would probably be around 139 or lower, a hard sell area would be 158 or higher. Depending on your time frame. I wouldn't be short biased here though, like I said, and I would be inclined to be on the long side of things. But note, I am super biased with BA. I am a BA moon boy so don't listen to me.
Technicals and Chart:
(Main chart above)
BA is flagging in a little mini bird or bearish bat type pattern and I do expect pullback. My ideal pullback zone is marked in the chart with the circle, which also corresponds with the projected buy zone of 139.
A bounce here, IMO, would be a very good sign and a buy.
A break here would invalidate my bullish bias and likely bring us to the bottom of the 131 range.
Key Points:
- Range next week 131 - 159; bullish divergence from the previous range 125 - 148.
- Expecting some pullback but not overly short biased here.
- Look for a break below 139 if you are short biased.
- Look for a bounce at 139 to 141 if you are long biased.
That's it!
Trade safe, let me know your comments/questions and critiques below.
Thanks for reading.
