The Boeing Company (NYSE:BA) slid after ratings agencies issued a negative outlook
Boeing shares slid Monday after ratings agencies issued a negative outlooks for the maker of the 737 Max, as the fallout from two fatal crashes of the planes continue to pile up on the manufacturer.
Fitch Ratings and Moody’s Investors Service upheld Boeing’s credit ratings but warned that the worldwide grounding is going on longer than anticipated, driving up Boeing’s costs and hurting cash flow, putting its credit ratings at risk.
The planes, Boeing’s bestselling jetliner ever, have been grounded worldwide since mid-March after the second of two crashes. Together the air disasters claimed 346 lives.
Boeing paused deliveries of the Max and cut production by nearly 20% to 42 a month in the wake of the second crash. Airplane makers generally are paid once the aircraft are delivered to airlines. New orders for the planes have ground to a halt.
Fitch said it cut its outlook from “stable” to “negative” because Boeing could end up paying airlines more as the grounding wears on, and regulatory uncertainty is posing “the growing logistical challenge of returning parked planes to service and delivering stored post-production aircraft.”
“Fitch believes the 737 MAX will remain a concern throughout the aviation credit sector into 2020,” the ratings agency said in a release. “The 737 MAX situation will reduce much of the financial cushion Boeing has at the current ‘A’ rating, leaving the company more exposed to other unforeseen events or industry developments.”
It said Boeing’s debt could rise by $10 billion to more than $24 billion by the end of the year because of the Max grounding. It added that this amount would fall when deliveries of the planes resume.
Boeing’s stock lost 1% to close at $373.42 a share.
Boeing is scheduled to report second-quarter earnings Wednesday morning.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 365.00.
The projected upper bound is: 392.65.
The projected lower bound is: 354.96.
The projected closing price is: 373.81.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 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 65.3673. This is not an overbought or oversold reading. The last signal was a sell 0 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 58.18. 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 47 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 157.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 2 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 5 period(s) ago.
Rex Takasugi – TD Profile
BOEING CO closed down -3.940 at 373.420. Volume was 30% below average (neutral) and Bollinger Bands were 30% narrower than normal.
Open High Low Close Volume___
375.510 382.240 371.900 373.420 710,738
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 363.55 356.70 364.29
Volatility: 35 33 40
Volume: 809,573 780,295 1,044,779
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 2.5% above its 200-period moving average and is in an upward 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 bullish on BA.N and have had this outlook for the last 4 periods.