As the world slowly returns to normal, Jim Cramer told Mad Money viewers Wednesday night there will be a whole new set of leaders in the market.
Boeing Co. (BA) will be leading the aerospace stocks higher, as the company puts both the pandemic and its 737 Max problems behind them. As travel resumes, Boeing will see plenty of new orders for planes and all of the airlines will rise as well. In fact, all of the travel names will be in bull market mode, according to Cramer.
Let's check out the charts of BA.
In this daily bar chart of BA, below, we can see that prices have finally broken above their June highs - a breakout that took a long time coming. Prices are above the rising 50-day moving average line which just crossed above the still declining 200-day moving average line. This belated buy signal comes more than $100 off the lows.
The On-Balance-Volume (OBV) line has been moving up the past two months but still has not broken above its June peak.
The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but has narrowed significantly in recent sessions.
In this weekly bar chart of BA, below, we can see that the pandemic decline did a lot of damage to the chart. Prices have yet to retrace 50% of the decline so from that perspective the bears are still in control of the chart. BA is trading above the 40-week moving average line but its slope is still very much negative.
The weekly OBV line shows some improvement but the longer-term trend is very negative.
The MACD oscillator is close to moving above the zero line for a buy signal - wait for it.
In this daily Point and Figure chart of BA, below, we can see a potential upside price target in the $296 area.
In this weekly Point and Figure chart of BA, below, we can see a potential longer-term price target of $384.
Bottom line strategy: The charts of BA have improved significantly in the past month. The Point and Figure charts show bullish potential but they ignore time and volume. BA can work higher in 2021 but I feel we are likely to see further sideways price action before fresh gains.