“Levels around $120 are highly probable.” You could find this sentence in “Boeing Approaching Severe Turbulence”, published on April 13th, 2015, when the stock was trading near $154. As always, our bearish expectations were based only on the Elliott Wave Principle. The analysis of Boeing stock we made five months ago is visible on the chart below.
As you can see, there was a very clear five-wave impulse to the upside on the weekly chart of Boeing. According to the theory, every impulse is followed by a correction in the opposite direction. That was all we needed to know. Now, let’s see what the stock did in August.
On August 24th, the “Black Monday”, Boeing fell as low as $115.50. The target of $120 has been reached and exceeded. We have to admit we did not expect it to happen this soon. That is the reason why we believe there is still more weakness ahead. The latest sharp sell-off seems to be just wave A of a larger A-B-C retracement. Wave B could be very deceptive, so investors should not trust it. If they do, wave C could be devastating.
