Stock of the day: Boeing
22 June 2023
Today, let's turn our attention to Boeing, an intriguing case study that's demonstrated a volatile trajectory over the past month, prompting some interesting analysis. Boeing's performance has been quite the spectacle recently. After an optimistic start to June, the stock demonstrated its volatility as it began a downturn that continues even now. Earlier in the month, the stock appeared to rally as it broke free from a constraining triangle pattern, identified by the blue lines on the chart. This upward trajectory, however, was short-lived and lacked the expected vigor.
The price movement then morphed into a head and shoulder pattern, indicated by yellow on the chart. This pattern is traditionally viewed as a bearish signal, effectively counteracting the previous buy signal. The price not only broke the neckline of this pattern (depicted in red), but the downward slide accelerated, leading the price back into the triangle.
This reentry into the triangle deems the previous breakout a false one, contributing to a lackluster bullish outlook. False breakouts are typically considered adverse trading signals, which, in Boeing's case, leaves us with a distinct signal to short.