Hello, everyone! This week, we’re going to explore the latest trends and analyze what’s happening with Boeing$Boeing(BA.US)$, a leading global aerospace company.
What’s new?
Boeing faces significant challenges as its stock prices declined for three consecutive days following a harrowing incident on Monday, March 11th.
A Boeing 787 Dreamliner experienced a sudden mid-air drop due to a ‘technical event,’ resulting in injuries to numerous passengers. The pilot reported a temporary loss of aircraft control.
This event has not only impacted Boeing’s shares but also affected the stock prices of several airlines, partly due to issues with the delivery of Boeing jets.
In the last two months, Boeing has faced its second significant mishap. An incident involving as Alaska Airlines Boeing 737 Max, where part of the plane’s exterior detached shortly after takeoff, led to the temporary grounding of specific 737 Max models across the country.
These events have eroded trust in Boeing and cast a shadow over its quality assurance practices. The operational interruptions and prospect of legal action pose a substantial risk of financial loss for the company.
Since the year’s start, Boeing's share price has plummeted by 30%, wiping out more than $40 billion in market value and lagging behind the performance of major US stock indices.
Chart of the day
Given the aerospace industry’s paramount focus on safety, Boeing’s (BA) dismal start to 2024 is unsurprising. Consequently, market sentiment is currently delicate, and it may take a while for investors to fully digest the adverse developments.
Trend analysis:
1. Boeing (BA) began a strong uptrend in late October 2023, with the price gaining approximately 50% through mid-December.
2. The stock experienced a sharp decline at the beginning of the year, following the Boeing 737 Max accident. With a price pullback of over 61.8%, the market trend reversed.
3. The stock consolidated for nearly two months, forming a descending triangle pattern.
4. Following the Boeing 787 Dreamliner accident, the stock plummeted again and broke out below the triangle formation.
Technical indicators:
The daily chart below indicates weak technical signals, such as a moving average convergence/divergence (MACD) bearish crossover, an oversold situation on the 14-day relative strength index (RSI), and a volume spike with declining prices. These indicators suggest that a potential rebound for BA may take time.
Looking at the weekly chart, the ascending channel in BA has been disrupted, implying potential downside risks to the trend.
Next move?
Looking ahead, after the breakout of the descending triangle on the daily chart, it's possible that the bears might be targeting a further drop in price.
From the bulls' perspective, it is important to keep an eye on the late October low of $176, which also represents a 52-week low. BA could gain potential support around this level, while a potential breakout could result in a further downside move.
This presentation discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve.
All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
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