Boeing (NYSE:BA) — The world’s second largest manufacturer of commercial jets and fourth largest military weapons maker had a spectacular 26% advance from its October lows. But since January, it has been consolidating within a narrow band between $71 and $76.
Despite analysts’ forecasts of significant earnings gains in 2012 and 2013, and a target of $86, the stock broke down from a gap at $73.30 to close yesterday at $70.60. The stochastic is telling us that the stock is oversold near term, and after five down days the stock, like the market, is due for a bounce.
On Monday, the company announced that Russiahad ordered four of its 787-8 Dreamliners. And after yesterday’s close, Alcoa (NYSE:AA) beat earnings estimates and said that it had unusually large orders from Boeing.
Traders are presented with an opportunity for a quick trade as the probability of closing the gap up to $73.30 is high.