The Boeing Company (NYSE:BA) faces perhaps one of the biggest crises in its history
Boeing (NYSE:BA) faces perhaps one of the biggest crises in its history. The company had staked much of its future on the 737 Max line of aircraft. However, with two crashes in the last five months, regulators and airlines have grounded the aircraft. Now, the repercussions not only extend to BA stock, but the airline industry in general.
I held a different view on Boeing stock as late as March 9. Until then, I would have cited the 50%-plus run-up in the early part of the year and the pension liabilities as the only reasons to avoid BA shares. The company had built up a seven-year backlog on plane orders. With the 21x price-to-earnings (PE) ratio and the five-year average annual profit growth rate of 22.1%, I considered BA stock a buy on any pullback.
After the second crash in less than five months, the problems with the 737 Max became too large to ignore. Now, many have lost confidence in Boeing’s leadership as it appears the company cut critical corners to get its plane in the air. This leads to three important implications.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 404.71.
The projected lower bound is: 359.30.
The projected closing price is: 382.01.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 88.5364. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 10 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 45.93. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 4 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 129.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 10 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 0 period(s) ago.
Rex Takasugi – TD Profile
BOEING CO closed up 6.980 at 381.420. Volume was 14% above average (neutral) and Bollinger Bands were 35% wider than normal.
Open High Low Close Volume___
376.700 382.130 374.820 381.420 1,436,665
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 372.77 394.94 359.20
Volatility: 29 37 37
Volume: 1,476,191 1,415,820 992,237
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
BOEING CO is currently 6.2% above its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of BA.N at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on BA.N and have had this outlook for the last 13 periods.