Charting Asia

Boeing Chart Looks Set to Takeoff

Two years behind schedule, Boeing is finally ready to test-flight its hotly anticipated aircraft, the 787 Dreamliner, Tuesday.

The test-flight data marks a huge step in the development of the revolutionary airplane, whose promise of increased fuel efficiency and comfort has attracted a record number of orders for a plane still in development.

Within those 2 years -- Boeing has managed to ruffle a lot of feathers, announcing five embarrassing test-flight delays, which ultimately resulted in delays to its delivery schedule.

The Boeing chart displays the same sort of conditions: promise and problems.

The dominant feature on the chart is the  up sloping triangle. This is a bullish pattern. It is created by three features:

  • The first is a historical resistance level. This is located near $53.00.
  • The second feature is a well defined up-sloping trend line. The trend line with Boeing has been tested several times so there is a high level of probability that any retreat will successfully rebound from the value of the trend line.
  • The third feature is a fast and consistent rise near the base, or vertical section of the triangle pattern. This base is defined with 5 weeks of consistent price falls. This is the area where we place the measurement calculation for the triangle base.

In this case we can think of the up-sloping triangle as a ramp that allows the airplane to gather sufficient airspeed to a smooth takeoff. Takeoff velocity is achieved when the price moves above the resistance level near $53.00. The upside target for this launch is calculated using the base of the triangle. This measurement is projected upwards and gives an upside target near  $71.00.

The up-sloping triangle pattern comes with two important warnings:

  • The first is that the chart pattern is a measured move or calculated target. It is not a signal of a trend continuation. When prices achieve the upside target near $71.00 there is no indication of how the trend will develop beyond that point. It may develop into a trend continuation, or the flight may simply return to the ground level. The support level in this situation is created by the up-sloping trend line. A successful retest of the trend line support points the way to a continuation of the uptrend and a retest of the $71.00 chart pattern targets.
  • The second warning is similar to a brace position. It's a crash warning when the price closes below the up-sloping trend line. This shows a failure of the up-sloping triangle pattern. The depth of the fall is calculated using the base of the triangle and projecting it downwards. This gives a downside target between $36.00 and $34.00. A  failure of this up-sloping chart pattern  signals a none-too-soft landing with limited support near $42.00.

Despite Dreamliner's prior launch hiccups, the build up of momentum in price shown by the trend line and the up-sloping triangle pattern suggests there is a higher  probability of success for Boeing.

The altitude target for this first flight is near $71.00 with the potential upside peaks near $76.00. The higher peak is calculated using the inverted trend recovery pattern

Boeing present a trading opportunity within the context of a well defined uptrend recovery.

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