BOEING TRADE

I normally don't update the blog during the trading day, but I see a nice possible pattern that you could look to trade. It is a counter trend trade which would make it a bit more risky, but the price pattern would suggest that it is a worthwhile risk. The stock is Boeing (ticker symbol BA). The price action last Friday (3/19/10) was very bearish. It gapped up then sold off on huge volume. When a stock has run up like Boeing, then has a gap up and sell off, it usually means that the stock is going to pull back soon. In the case of Boeing, I think it can pull back about $6 or $7. They key to this trade is to wait for confirmation and to keep the stop pretty tight. I would look for an entry if the stock breaks below today's low tomorrow. I would then look to place a stop above today's high. A more aggressive trade would be to get in at the close of the market today, then place a stop above today's high...unless it closes at the high. In that case, I would definitely wait for more confirmation before getting in.