Boeing could rally back to record highs, trader says

Don’t write off Boeing just yet.

That’s according to Tradinganalysis.com founder Todd Gordon, who says the airplane manufacturer could bounce back toward its record highs after a 20% fall since March.

“The first thing … is the relative performance of Boeing to the XLI, which is the industrial ETF. … We’ve seen some underperformance, but we’ve seen a little bit of a hook up, ” he told CNBC’s “Trading Nation ” on Tuesday. “Though industrials are underperforming the broader markets, we’re starting to see Boeing, which is the largest component, pick up.”

Boeing dropped 3% on Tuesday, the worst performer on the Dow, after The Wall Street Journal reported that the 737 Max may not be cleared for flight by the holiday travel season. The plane has been grounded since March after the second of two fatal crashes.

Gordon says Boeing’s bad news is already priced in and the stock could make a move back toward its highs.

“We have a low of about $290 right here. I think there’s some real value here, which is also comprised of this blue parallel channel,” said Gordon. He adds that $325 could act as a floor before the stock makes a move back to a record high.

However, Quint Tatro, founder and president of Joule Financial, says the stock may not be ready for a comeback.

“Fundamentally, this stock is very attractive, unbelievably strong free cash flow, balance sheet is sound, but from our vantage point, there’s just too many headwinds with not only the 737, but 14% of revenues still from China,” Tatro said on the show. “Even though it’s 20% off highs, this stock is a no-touch for us here, and I think investors have to be very, very careful thinking that this is a ‘buying the blood in the street’ and it could go a lot lower.”

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