A question has come in about the use of upside resistance targets. Why bother looking at the upside targets? The case of Boeing (BA) should prove instructive.
On April 15, 2020, we posted upside speed resistance lines for Boeing (BA). At the time, the upside resistance targets were:
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$276.82
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$326.57
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$383.59
Upside resistance targets are reflected in both time and price on a relative basis where a stock, after falling from a major high, will likely experience resistance on the move higher.
Since our April 15, 2020 posting on Boeing, a meaningful reflection of what investors should look for when anticipating the increase in the stock price is highlighted below.
As Boeing has increased from the low of $95.01, the stock price achieved the first upside resistance target at $267.82. Circled in red is the anticipated resistance in the stock price. What this usually means is that the stock price would decline or trade in a range.
For those determined to buy Boeing, regardless of fundamentals, upside resistance targets are a great places to anticipate possible turning points. The flip side to this story is that we generally expect a re-test of the prior low or some semblance of a decline near that level.
Worth noting, when Boeing cracks the upside resistance target of $267.82 then $326.57 becomes the next resistance target and $267.82 becomes the next support level. Prices above the first upside resistance target is generally the best level to buy a stock if it is backed by the fundamental prospects.
The story for Boeing is still unfolding. We’ll update the April 15, 2020 posting at situation continues to evolve.