From hot to not.
Boeing shares started 2018 on fire, rallying 20 percent in January. But it’s been in a holding pattern ever since, registering a scant return of 0.13 percent since Jan. 31. Now, one chart watcher says Boeing is about to throttle foward again.
“Boeing has been in consolidation for a long period of time, and it looks like we’re ready to move up,” Todd Gordon, founder of TradingAnalysis.com, said Thursday on CNBC’s “Trading Nation.”
On a chart of Boeing, Gordon notes that the stock recently broke through a downward trend that served as resistance through the summer.
That leads Gordon to believe that the former resistance at $353 is now the stock’s new support level, and Boeing will rally. It closed on Thursday at $355.46 a share.
Gordon is looking for Boeing to return to its highs reached in early June, which was around $375.
As a result, Gordon wants to buy the October monthly 365-strike calls and sell the October monthly 375-strike calls for a total of $2.93, or $293 per options contract. This means that should Boeing close below $365 on Oct. 19expiration, then Gordon would lose the $293 he paid for the trade. But should Boeing close above $375 on Oct. 19expiration, he could make a maximum reward of $707.
Shares of the Dow component are up 21 percent on the year.