When we last reviewed the charts of BA on Dec. 3 we wrote that, "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."
The stock rallied strongly that morning but it turns out that BA has been trading sideways to lower since our posting, which is never geared for short-term traders.
Let's see what might come next.
In the updated daily bar chart of BA, below, we can see that prices have been drifting a little lower with the trading volume lighter in December than during November. The Moving averages are still positive but the On-Balance-Volume (OBV) line has turned down, telling us that sellers of BA have been more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take profits sell signal.
In the weekly Japanese candlestick chart of BA, below, we can see that the two most recent candles are red, which tells us that prices have ended the week lower than the opening.
The weekly OBV line has turned lower and the slow stochastic indicator has crossed to the downside from above the 80 level for an overbought sell signal.
In this daily Point and Figure chart of BA, below, we can see a potential downside price target in the $214 area.
Bottom-line strategy: The broader stock market averages remain strong but various sentiment readings and some anecdotal things make me very nervous. BA could make one more "jiggle" lower toward the Point and Figure target of $214, however, I would not rule out spillover buying if the broader market soars higher. Strength above $241 could mean the correction is over. Stay nimble.