The charts show takeoff ahead for top Dow stock Boeing, says technician

Boeing shares have had a bumpy ride this week as trade tensions between China and the U.S. worsened. But, even after two days of sharp selling this week, the picture still looks good to one technician.

"While I think you should have some caution here, I still think the chart is pretty constructive," Bill Baruch, president of Blue Line Futures, told CNBC's "Trading Nation" on Wednesday. "I like the turn in the overall market right now."

Boeing and the broader S&P 500 have held onto key support levels even in the face of sell-offs, says Baruch.

"The S&P 500, their smooth 200-day moving average was never taken out," he said. "Boeing has held the 100-day moving average, a trendline dating back to September."

The S&P 500 bumped up against its 200-day moving average earlier this week but has since recovered ground above that level. It currently sits 2 percent above the line. The index dropped below its 50-day and 100-day moving average in March.

Boeing shares, meanwhile, have held above their 100-day and 200-day moving averages and only dropped below their 50-day in mid-March. Its shares are 18 percent above the 200-day.

"I think we could easily make it back to $341 if the broader market continues to work its way higher right now," explained Baruch.

Boeing needs to climb 2 percent higher to reach $341 a share. Analysts have an average $392 price target on the stock, according to data compiled by FactSet. That target implies 18 percent upside to current levels.

Larry McDonald, editor of the Bear Traps Report, is more pessimistic on Boeing's run. He says it might not be a good time to buy Boeing, because it might not be a good time to buy any stocks.

"You're talking about a stock where 70 ETFs have Boeing in their top 15 holdings. That's a scary statistic," McDonald said Wednesday on "Trading Nation." "If [stocks] were to break a critical trendline in a meaningful way, the ecosystem within the ETF sphere today probably doesn't have the liquidity to provide shareholders."

Trade fears have aggravated trading in Boeing and the S&P 500 this week. The S&P 500 had its fourth-worst daily performance of the year on Monday and set up for another down day on Wednesday before breaking into a rally. Boeing has bounced from a big sell-off one day to a rally the next.

"I would stay away from Boeing just because of this risk. It's just this too-crowded trade in this environment," said McDonald.

Boeing shares were up nearly 2 percent in early trade Thursday. Its stock remains the top performer in the Dow in the year to date.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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