The plane maker has not been able to put its 737 MAX woes behind it, as it has weighed on the stock price and investor sentiment for several quarters at this point.
While Boeing will be fine from financial perspective - it still has a deep order log and healthy cash flows - the loss of one of its best-selling models is certainly not a positive catalyst for the company. It also doesn’t help that Boeing is now losing the orders and deliveries battle to Airbus.
It’s also been a frustrating situation for airlines companies like Southwest Airlines (LUV) - Get Southwest Airlines Co. Report and American Airlines (AAL) - Get American Airlines Group, Inc. Report, which utilize the currently grounded 737 MAX.
Surprisingly, the stock has held up somewhat well despite the headlines and reports that continue to come about the 737 MAX. This latest bit of news is hurting the stock but it’s still holding up above range support.
Monday's developments are so intriguing that Real Money has selected Boeing as its Stock of the Day. Let’s look at the charts.
Trading Boeing Stock
The setup in Boeing has been pretty simple: It’s range-bound between support and resistance. Unfortunately though, headlines have been the driving factor for the share price.
Earnings and price action are not leading the way. Instead, developments with its 737 MAX jet, conversations with the FAA and rumors on production are leading the way. Headlines will move stocks and that’s true in most scenarios. There’s not much investors can do about it as it’s just part of the game.
That said, it would be nice if Boeing traded more on the technicals than on the news. Until this phase passes, investors have to be aware of the stock's primary driver.
In that case, buyers can continue to step in between $320 and $330 as that’s where range support has continued to buoy the name. Should support hold, look for BA stock to rebound. The first upside targets are its now-declining major moving averages. Currently, they are clustered between $352 and $359. Above that and range resistance near $375 is in play.
If range support begins to fail, the August lows at $317.70 will be on watch. Below that and $300 will be on the table, along with the 52-week low of $292.47.