Is Boeing Setting up for a Break Out?

Published on Friday, 10 February 2012 08:52 Written by TradersHuddle Wire

New York, February 10th (TradersHuddle.com) - Shares of Boeing Co. (NYSE:BA) closed the trading session at $75.90 placing the price action in a very tight range, given that calculated support is set at $72.85 and the calculated resistance based on an algorithm of peaks and troughs is set at $76.74

The Boeing Company (NYSE:BA) , together with its subsidiaries, engages in the design, development, manufacture, sale, and support of commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems and services worldwide. The company's family of the commercial jet aircrafts includes the 737, 747, 767, 777, and the new generation 787 Dreamliner. Boeing is based Chicago and founded in 1916.

Boeing's stock price action indicates that both sellers and buyers are materializing very close to each other, which is indicative to a momentum building area, as the stock can resolve by breaking out of the tight range that developed.

Traders wanting to establish a position should place close attention to Boeing's price action, as any movement outside its predefined range of $72.85 and $76.74 could grab the attention of momentum buyers, looking for a big movement in the price of the stock. Traders need to be aware that tight range resolution works both ways, hence, a move below support at $72.85 could spark above average selling. A tiered approach can be a good way to approach starting a position in Boeing's, by establishing a starter position while the stock is in the tight range, and then adding to the position as it breaks and closes above resistance.