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What should I do with the Boeing stock now?


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Boeing (BA) had a massive run from the Dec. lows of $292.47 to the end-Feb. highs of $446.01. That is a 52.49% increase within a short span of time. So, after such a sharp move, a correction was warranted. Following the adverse news of grounding of the Boeing 737 Max in a number of nations, the stock has corrected sharply in the past two weeks. So, what should be done with it now? Let's find out.

Even after the recent fall, the stock has not become negative. The 20-week EMA is above the 50-week SMA and the price is close to the 20-week EMA. This shows that the long-term trend is up, but the flattish 20-week EMA is pointing towards a consolidation in the near term.

The stock has completed a 50% retracement of the rally from $292.47 to $446.01. This is a critical support, below which the stock can drop to the 61.8% Fibonacci retracement level of $351.12. We expect the bulls to hold the zone between $369.24-$351.12. If successful, we anticipate the stock to move towards its lifetime highs of $446.01. A breakout to new highs will be a positive indication. However, if the price plunges below $351.12, it can correct to $325.33 and below that to $292.47. 

Where should you buy?

On the daily chart, we find that the 20-day EMA is sloping down and the RSI is close to the oversold levels. This shows that the bears have the advantage in the short-term. However, if the stock can breakout of the downtrend line and rise above both the moving averages, it will indicate strength. You can buy above $403 and keep a stop loss of $360. This suggestion will be invalidated if the stock plunges below $360 before rising. In that case, we will have to change both the buy level and the stop loss. Notwithstanding, the first target remains a move to $446.01. Above this, the uptrend will resume.

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Hey,
Shares of Boeing (NYSE: BA) dropped 7% this morning after the company’s main supplier, Spirit AeroSystems, said it was halting production for 737 MAX, raising doubts concerning further aeroplane production plans.

The news raised concerns among investors that slower production in 2020 could cause an even bigger delay in 737 MAX timeframe or a weaker-than-expected production rate. Last month, Boeing delivered 4 aircrafts and received orders for 9 non-passenger aeroplanes.  However, the number of cancellations for May was even higher - a total of 18 (14 for 737 MAX).

Boeing and aerospace manufacturers have been hit hardly by coronavirus pandemic, which resulted in production cuts and raising issues about future sales. Still, Boeing was having issues before COVID-19 as well as the 737 MAX got grounded in the aftermath of two crashes last year. 

“Boeing has been working to get the 737 Max recertified to fly, and hopes to conduct a key test flight in late June, but even if it can resume deliveries in the third quarter it is going to take time for Boeing to work through the large inventory of built but not delivered planes sitting on its lot,” according to the article.

Investors probably didn’t expect the Boeing stock to decline as recent news concerning 737 MAX were quite promising. Now investors will be even more concerned because even if 737 MAX returns to service, the demand will most likely be weak. The news likely caught Boeing investors off guard because most of the headlines on the 737 Max in recent weeks have been encouraging. But it is important to note that even if the plane does get airborne again in the months to come, demand is going to be weak. 

Before the 737 MAX grounding, the company planned to deliver 57 737 MAX aircrafts per month. Now, Boeing expects it will make 31 planes per month next year.
 

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Great question, thanks for asking.

With its wild swings over the previous months, Boeing stock has kept the market guessing. In March, for example, shares went from a high of almost $300 to $89 before leaping to over $180 less than a week later.
The following months were characterized by a $120-$150 range with May ending at $145.85. June has been equally unsteady after the FAA asked airlines to inspect a crucial part in the 737 MAX. Boeing is working to fly this aircraft since last year when it was grounded for two deadly crashes.
The grounding together with the Coronavirus outbreak has taken a toll on the corporation’s balance sheet. The opening quarter of 2020 saw Boeing lose $4.3 billion in addition to revenues diving by $641 million. By the end of March this year, debts stood at $38.9 billion increasing from 2017’s $11.1 billion.
But things could change for the aerospace company with the mounting pressure to reopen economies and resume air travel. Moreover, the past month witnessed a growth of roughly 28% with Boeing outperforming rival stocks.
 

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Hello,

While we continue to hear good news about the re-certification of the 737 Max airplane, Boeing now will have to encounter more important challenges. The airline industry took a huge blow on a global scale in terms of terrible passenger levels and the companies won’t be needing new aircrafts for years. 

Shares of Boeing rebounded recently on the hopes of an economic recovery. However, the thing is that airlines don’t need the 737 Max following the prolonged re-certification process after the two fatal crashes last year.

Therefore, Boeing’s stock doesn’t look very attractive right now and it will stay that way until the company sees some significant financial developments and any future positive news regarding the recertification of the 737 Max isn’t a reason good enough to invest in the stock.
 

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