The company announced that it will split the chairman and CEO roles, both of which were previously occupied by Dennis Muilenburg. Muilenburg will remain as the CEO and president, as well as stay on the board of directors. David Calhoun will take the role of non-executive chairman.
The news comes after reports of even more possible delays in the 737 MAX, as well as the 737 NG having cracking issues. Given all the news lately, Boeing stock is a solid candidate for Real Money's Stock of the Day.
Boeing stock is getting good at deflecting the headlines, though. For instance, in a mixed Monday morning tape, shares are up 80 basis points to $378. The stock continues to hold a critical area of support, which bodes well for the stock so long as the overall market can hang in there.
Trading Boeing Stock
Before we look at the upside, let's map out the downside -- just as investors should always do. We shouldn't first look at how much we can make on a potential trade or investment. We should be looking at how much we could lose on the trade.
For Boeing, that means looking at must-hold support, which we have consistently considered to be around $360. That was prior range resistance before BA stock broke out over this mark in January. Once the stock pulled back, Boeing stock found support at $360, cementing it as former range resistance.
Now back over it again, it's important to see shares maintain above this level. However, it goes beyond that, too. The 50% retracement is currently at $364.13, while the 50-day and 200-day moving averages currently rest at ~$361.50 and $365.50, respectively.
In other words, if BA stock falls below $360, it will have broken below former range resistance, the 50% retracement and 50-day and 200-day moving averages. That's a bad look for bulls and could open up the stock to notable downside from there.
As long as it's above that area, though, Boeing stock has upside potential. Shares have been coiling nicely just below $380 (purple lines), while the 61.8% retracement currently sits near $382.
A move over the 61.8% retracement could trigger a rally up to the September high of $391. Over $391 and $400 is on the table, with a larger rally up to the 78.6% retracement near $408 being in the realm of possibilities as well.
The bottom line? Look for a move to $382 on the upside, and see that BA stock holds $360 on the downside.