Boeing Whipsaws Investors After Earnings and Fed Statement

Published on Wednesday, 25 January 2012 20:01 Written by David Becker

New York, January 25^th  (TradersHuddle.com) – Boeing Co. (NYSE:BA), reported better than expected earnings on Wednesday before the bell, but disappointing guidance put the Dow Industrials on the defensive for most of the trading session.  Stocks turned when the FOMC announced its dovish statement.  The share price of BA was whipsawed initially moving lower and then surging higher after the Federal Reserve Statement.  The stock has been grinding higher during January, moving closer to testing solid weekly resistance near the $80 dollar level.  A break of this level, could lead to a test of long term resistance near $90 and then $100.

Prices during January have showed a consolidative tone as they grind upward up until Wednesday, failing to make any significant headway.  Prices surged through the 50-day moving average near 69.70 in December, after bouncing off of support levels near the 200-day moving average near 58.70 in October. The flag pattern created in December is the typical consolidative pattern that reflects the "pause the refreshes".  The 20-day moving average has held as solid support through January, and will be the first line of support for BA.

The relative strength index (RSI) has flat lined in the 60 level during the first trading month of the year, showing positive momentum without moving into overbought territory.  The MACD index level is below zero, with both the spread (between the 12-day moving average and the 26-day moving average) and the 9-day moving average of the spread printing the same level near 1.22.  The MACD is reflecting very little momentum, as the moving averages are now converging.

The Fed expects interest rates to remain close to zero until 2014, which should help push BA above resistance.  Look for a close above 76.50 to target $80.