The Boeing Company (NYSE:BA) stock is down after the crash of a Boeing 737 Max 8 Jet
Boeing stock is down after the crash of a Boeing 737 Max 8 Jet. So many lives lost … our thoughts are with the families.
With emotions still running high, many investors are wondering how to approach BA stock now.
The actual decision to buy the stock on a dip should always depend on one’s time frame and portfolio balance. If the intent is to own BA shares for the long term, then timing is not crucial since BA will be higher later. But a 10% drop on a headline is definitely an opportunity to consider.
On Monday, Boeing stock fell 12% on the headline that there could be a problem with a version of the 737. Some airlines even grounded the planes just in case the problem is systemic. While the dip was scary to those long the stock, it only closed down 5%, so the bulls bought it up off the lows. This morning, it’s down again, but still off the low it set on Monday.
As a result, BA has a sales backlog that extends to a decade. So the fundamentals and the P&L should remain pristine for at least that long. This is what makes it an exciting stock to be long in. On dips, these unique fundamentals act as a put below, thereby limiting the disaster business scenario.
For the last few months, BA stock has been hostage to the tariff headlines and fears that China will stop ordering planes from the U.S. These fears are overblown since there is no alternative to BA. So if China wants to own more planes, they most likely need BA for that. Global capacity is limited as it is and if it drops out of the Boeing sales pipeline, China risks falling back in the cue to delivery.
Sometimes the threatening headlines that cause temporary grief become catalysts soon after the threats are over. So in this case, if and when we get an official tariff deal between the U.S. and China, I bet that this will reignite the buyers in Boeing stock.
As for the threat from this situation, it is encouraging that the FAA said it sees no reason to act yet before they analyze the data from the disaster. This means that there is nothing obvious yet, but the threat of headlines still looms for a few more days or weeks depending on the speed of the investigation.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 400.49.
The projected lower bound is: 352.66.
The projected closing price is: 376.58.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 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 31.3070. This is not an overbought or oversold reading. The last signal was a buy 1 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 31.11. 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 sell 5 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 -247.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 6 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 sell 6 period(s) ago.
Rex Takasugi – TD Profile
BOEING CO closed down -24.600 at 375.410. Volume was 382% above average (trending) and Bollinger Bands were 4% narrower than normal.
Open High Low Close Volume___
384.500 390.000 368.880 375.410 5,189,294
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 422.38 385.26 358.47
Volatility: 49 41 37
Volume: 1,749,913 1,083,892 899,157
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 4.7% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume out of BA.N (mildly bearish). Our trend forecasting oscillators are currently bearish on BA.N and have had this outlook for the last 0 periods.
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