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Boeing's stock could see more turbulence

Talking Numbers

Boeing's stock could see more turbulence

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Boeing's stock could see more turbulence

Boeing's stock could see more turbulence
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The technicals are now saying buy this stock: Pro

The technicals are now saying buy this stock: Pro Up next

The technicals are now saying buy this stock: Pro

Boeing’s stock failed to take off Wednesday despite reporting better-than-expected earnings and raising its full-year forecast. The company reported second-quarter profit of $2.24 per share, almost a quarter above estimates, but revenue was slightly lower than Wall Street anticipated.

The results sent shares of the aerospace giant down more than 2 percent, making it the worst Dow component of the day.

(Watch: Boeing under pressure)

So, is the recent pullback a buying opportunity? Or should investors stay away from the high-flier?

“[Boeing] has been the biggest underperformer of the entire aerospace and defense sector this year. It’s lagged all the other names,” said Greywolf Execution Partners’ chief technical analyst, Mark Newton, who believes Boeing would be a better buy  around $107 per share, roughly 15 percent lower than the current stock price.

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Boeing's short-term chart shows temporary support near $125.

Boeing's short-term chart shows temporary support near $125.

“After doubling last year, you can see the stock has been largely range bound since January of this year. And it’s recently pulled back, after today, to an area that should be temporary trend line support for this stock,” Newton noted on a chart dating back to October 2013.

But according to Newton, Boeing’s longer-term chart shows that the stock will have trouble holding that support.

(Watch: Airlines set to take off?)

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Boeing's long-term chart shows potential downside to $107.

Boeing's long-term chart shows potential downside to $107.

“When you look at the chart on a weekly basis, you can see that really after the stock doubled you got above the highs from 2010 to 2012, you got extremely overbought getting past the 2007 highs. And now you are just starting to show signs of consolidation,” he noted. “This doesn’t appear over yet. Momentum still appears negative on a weekly basis.”

RBC Capital Markets’ U.S. quantitative strategist, Ron Dottin, who has a “neutral” rating on Boeing, sees a strong fundamental argument for the company, but isn’t quite ready to buy. His reason, the stock is fully priced.

“We generally like names in the industrial space that trade below the S&P 500, and this one is right on it. I think that what’s happening is that people are starting to rotate out of names like Boeing and into other old economy stocks that trade at cheaper valuations.”

Click on the video above for the full discussion with Newton and Dottin on Wednesday’s episode of CNBC’s “Street Signs.”

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