4 Trades to Fly Higher with Boeing: Bonus Idea

• Posted by Greg Harmon
• on November 21st, 2016

Here is your Bonus Idea with links to the full Top Ten:

Boeing, $BA, made a peak in December 2015 and then started to dive lower into 2016. It found a bottom in February and started higher after a 30% drop. The move higher stopped as it hit one of the gaps on the way down, from January, at 136, in March. Over the next 7 months it tested that 136 level 4 more times and failed, before the 5th time it pushed through to the upside.

That move broke an 8 month ascending triangle and gives a target to 160. The initial move was bought voraciously and moved out of the Bollinger Bands® to the upside. It fell back on profit taking and declining volume, a near perfect bull flag, finding a higher low above the breakout area. The next leg higher then took the stock to the 150 level before another bull flag ensued.

Friday saw a move higher within the flag, but it has done that before. What may make this time different is that the RSI turned back higher Friday and the MACD avoided a cross down. Both remain in bullish ranges. The Bollinger Bands have also turned higher. There is resistance at 150 and then 155 and 159. Support lower comes at 144 and 141.25 before 138.65 and 136. Short interest is moderate at 4%.

The options chains show strong open interest to the downside in the December puts at the 140 and 135 strikes. In January there is a cluster in the put open interest from 110 to 130, but sizable open interest on the call side from 135 to 160, biggest at 145. The February options, the first beyond the next earnings report, shows open interest focused on the call side at 145 and 150.

Boeing, Ticker: $BA

Trade Idea 1: Buy the stock on a move over 147.50 with a stop at 144.

Trade Idea 2: Buy the stock on a move over 147.50 with a December 145/135 Put Spread and selling a January 155 Covered Call (55 cents for the collar)

Trade Idea 3: Buy the January 135/150/160 Call Spread Risk Reversal for $1.10.

Trade Idea 4: Buy the December/February 150 Call Calendar ($2.75) and sell the January 135 Put for $1.40.

Premium Content
The Best

The Rest Premium

Free Content
The Rest

If you like what you see sign up for more ideas and deeper analysis using the Get Premium button above.

After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with November Options Expiration behind and heading into the shortened Thanksgiving holiday week, sees equity markets looking strong.

Elsewhere look for Gold to continue lower while Crude Oil moves to the upside in the short run. The US Dollar Index remains strong as it moves higher while US Treasuries continue to be biased lower. The Shanghai Composite looks to continue to drift higher and Emerging Markets may have found support in their move lower.

Volatility looks to remain at unusually low levels keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts show strength in the IWM and SPY both short term and in the intermediate time frame. The QQQ however remains stuck in consolidation in the longer timeframe. Use this information as you prepare for the coming week and trad’em well.

Want to learn more about Dragonfly Capital Views?
Dragonfly Capital Views Performance Through September 2016 and sign up here

Take advantage of the Holiday Sale here!

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus