Is Boeing Done For? What Charts Say After 64% Fall

Boeing shares have become a disaster.
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Shares of Boeing  (BA) - Get Report have become a disaster. Shares have declined 10% on Thursday and have fallen more than 60% from its highs.

Originally, the 737 MAX was the company’s biggest headache. Grounded jets, regulatory issues and a drying up of orders has put a serious strain on Boeing’s business.

Throw in the coronavirus and this nightmare scenario for Boeing is becoming reality. As if the 737 MAX issues weren’t enough, airline stocks are getting crushed as demand sinks for flights and as travel bans are on the rise. Plus, marketwide volatility is running rampant.

Investors fear that demand for new jet orders will wane and that cancellations will follow. Stoking Boeing-specific fears is the company's decision to draw down the entirety of its recent $13.8 billion loan.

This is being reflected in the stock price. Shares are down 35.5% this week and 43% this month, while at Thursday’s low the stock was down 64.3% from the all-time highs.

Trading Boeing Stock

Weekly chart of Boeing stock. 

Weekly chart of Boeing stock. 

In the last week of February, Boeing stock tested down to the 200-week moving average and held this area as support. That wasn’t the same story a week later though, with shares knifing through this mark, although closing off the lows.

It was a bad omen and a sign of things to come. With this support layer out of the way, it should have been a warning sign to bulls. If Boeing were to reclaim the 200-week moving average, then the bulls would have had a leg to stand on. But it didn’t reclaim this mark and so they didn’t have a case to make.

Now we know why, as shares have fallen $100 apiece at one point this week, as the stock tries to find its footing in the $160 to $170 range.

If Boeing can get going back over $180, it puts $200 and $220 on the table. However, if it can’t find buyers and the stock takes out the recent low near $155, the $135 to $140 breakout zone may be the next downside target.

I’m not trying to be an alarmist in any regard. But the simple fact of the matter is that the Dow Jones is now in bear market territory, while the Volatility Index VIX is north of $60. If buyers step up and volatility plunges, the Dow, Boeing and others may surge higher and reclaim once-vital support levels. However, if the selling keeps up, we have downside levels to keep in mind too.