Shares of Boeing have literally soared more than 10% since hitting lows near $330 last week. A huge part of the climb was indeed justified, as the airline's ill-fated 737-MAX could hit the skies again.
Boeing's shares have taken off so high, and very quickly, giving investors a big reason to smile.
Although the disgrace from the company's recent crashes and the ongoing tariff noise is seen to provide some sort of turbulence to the airline's recent strong ascent, the aircraft-maker is breaking out from its stellar week since the start of the year.
Boeing (NYSE: BA) managed to keep its composure against the US-China economic sell-off, bucking its pattern as a stock sensitive to market disruptions.
The main spark behind Boeing's recent rise was speculations that its 737-MAX may be given the green light to fly again in October. However, the US Federal Aviation Administration, disclosed they have yet to set a date on the aircraft's return to service.
In an interview with Trading Nation, Blue Line Futures president Bill Baruch said Boeing's nightmares are clearly behind it. "This is a resilient stock and I do think these setbacks are buying opportunities." Shares of the airline rose almost 9 percent last week, but Baruch pointed out there could be some moderate bumps ahead for the company prior to earnings next month.
The aircraft maker's stock is definitely a no-bargain in terms of valuation. Its trailing price-to-earnings ratio is more than 40 and is by far its highest in the last decade. Similar measurements, like price-to-sales and price-to-free cash flow, likewise come with a huge price tag. It will not be easy for the company's stock to climb higher based on any further expansion.
Analysts see a collateral channel that the airline's stock is hovering back and forth. BA recently rose from $320, and currently, its resistance is near the $380 border. "I expect to see this continue to ping-pong back and forth into earnings two months from now," Baruch noted.
Boeing's shares are getting interestingly over-bought from a technical standpoint. Its 5-day relative strength index (RSI) is currently pegged at the highest boundary since it hit all-time peak sat $446. BA now trades at a bigger premium to its 20-day moving average. BA expects a major overhead resistance at the $375 region.
BA stocks were up 1 percent during extended sessions, Monday. The company would need to up its tempo to 6 percent before achieving Baruch's resistance goal at $380. BA last traded above this area in mid-July.
