Will kick off the week starting with BA, as it has been kind to me lately.
So, BA is technically still a long but there are some caveats to this, so let's get into it. First, per ush, recap.
BA Recap:
First, BA broke through its trading range last week, marking the second week in a row BA has broken through its predicted trading range. This shows, and I emphasize, VERY VERY strong momentum. BA traditionally NEVER breaks out of its trading range. I have reviewed this over 2021 and breakouts were rare. So this shows that momentum is still going strong here and BA is an admirable choice for you momentum players.
Second, BA is not doing the classic BA move and giving back its gains. It did really experience some difficulty this past week at the top end of its trading range, but this is expected because its technically beyond what the stock should naturally be trading in. BUT, it still managed to stay true and hold its upper range gains.
Third and Final, BA is forming one of my favourite and famous chart patterns, the bullish bird. Well... whether is a bullish bird is TBD, but we will get into this in the analysis portion.
Alright now for the analysis.
What to Expect Next Week:
Fundamentals and Earnings:
So next week is going to be wild for all stocks and BA is not immune. I will go more into the economic fundamentals in my SPY post but just know that this week we have earnings on multiple BIG tech companies that lead the S&P 500 (such as MSFT, AAPl) AND BA (Which leads the Dow Jones Industrial Index). Tech companies have been preparing investors for disappointment. Furthermore, we have an FOMC meeting which analysts collectively expect another 75 BP hike to be announced here.
In terms of earnings, BA has been more silent than other companies about what to expect for their earnings but let's get into what I personally expect from BA earnings (please note, I am not an analyst in any sense of the word, I am just a STAN for BA who actually reads SEC filings for the company).
1. In classic BA fashion, last earnings releases fell short. But it fell short in key areas that tend to carry BA, most notably, its defense profits. BA typically derives much of their revenue from defense which offset their losses in other areas, but their last earnings were negative all around in every aspect.
2. BA has steadily been gaining contracts in the commercial sense since last earnings release, but its defense contracts have been lacking from what I can see.
3. BA has been branching out into space travel and is a growing competition with SpaceX in this area; however, they have yet to secure any formal contracts or any formal commercial plans as of yet.
4. Analysts expect BA's EPS to be positive this earnings date.
As such, I expect BA's earnings to be an improvement from previous earnings; however, I still expect BA to likely fall short of rainbows and butterflies. But I do expect the modest improvement in earnings to be a catalyst. BA investors (of which I used to be one) tend to expect bad news. However, when the news is less bad than usual, it generally sparks more interest. In general though, BA's response to earnings releases tends to be more tame than others unless they truly outperform, then you tend to get some aggressive bullishness. I look forward to seeing how this plays out.
Technicals:
- On the Daily and on the 1 hour you can see the bullish bird lead up.
- Right now BA is doing the pre-breakout dip. This is the make or break it portion of the bullish bird. Here, BA will either break to the upside or collapse back down.
- The pre-breakout dip can be aggressive but in this case it should not dip more than 148 - 149 to maintain the bullish bird pattern and break out. Any lower it is invalidated.
- RSI is running a little on the hot side on most major time frames including the daily which generally is sorted out with the pre-breakout pullback.
Trading Range
Predicted trading range is 142 to 173.
Verdict:
It could go either way with earnings and FOMC around the corner. Its a really hard call here.
But one important thing to keep in mind is BA doesn't follow SPY and generally trades independently of the market. It does lead DIA but it always managers to do its own thing and be independent of the market. So if and or when you trade BA, do not look to traditional indexes to guide your analysis because BA is a maverick in the same sense as TSLA.
My likely BA play:
Because of the crazy news being released and BA's inclination to break out to the upside of its range, my likely play this week is a straddle.
I will buy 1 weekly call and put on either end of the trading range (potentially 2 week) with an estimated net debit of about 0.94$ with the expectation that BA is going to break out one way or the other from its anticipated range as it has done for the last 2 weeks. Profits are technically unlimited but assuming that BA just reaches the top or bottom of the range and doesn't go higher or lower, net profit would be around 320 - 350. Obviously much higher if it surpasses the range like it has been lately (which is what I am hoping for). Conservative but this is an experiment as I have never tried something like this before. But with stocks constantly breaking through my ranges, this is an intriguing play.
That's it for now!
Trade safe everyone and leave your questions/comments and critiques below!
Thanks for reading
So, BA is technically still a long but there are some caveats to this, so let's get into it. First, per ush, recap.
BA Recap:
First, BA broke through its trading range last week, marking the second week in a row BA has broken through its predicted trading range. This shows, and I emphasize, VERY VERY strong momentum. BA traditionally NEVER breaks out of its trading range. I have reviewed this over 2021 and breakouts were rare. So this shows that momentum is still going strong here and BA is an admirable choice for you momentum players.
Second, BA is not doing the classic BA move and giving back its gains. It did really experience some difficulty this past week at the top end of its trading range, but this is expected because its technically beyond what the stock should naturally be trading in. BUT, it still managed to stay true and hold its upper range gains.
Third and Final, BA is forming one of my favourite and famous chart patterns, the bullish bird. Well... whether is a bullish bird is TBD, but we will get into this in the analysis portion.
Alright now for the analysis.
What to Expect Next Week:
Fundamentals and Earnings:
So next week is going to be wild for all stocks and BA is not immune. I will go more into the economic fundamentals in my SPY post but just know that this week we have earnings on multiple BIG tech companies that lead the S&P 500 (such as MSFT, AAPl) AND BA (Which leads the Dow Jones Industrial Index). Tech companies have been preparing investors for disappointment. Furthermore, we have an FOMC meeting which analysts collectively expect another 75 BP hike to be announced here.
In terms of earnings, BA has been more silent than other companies about what to expect for their earnings but let's get into what I personally expect from BA earnings (please note, I am not an analyst in any sense of the word, I am just a STAN for BA who actually reads SEC filings for the company).
1. In classic BA fashion, last earnings releases fell short. But it fell short in key areas that tend to carry BA, most notably, its defense profits. BA typically derives much of their revenue from defense which offset their losses in other areas, but their last earnings were negative all around in every aspect.
2. BA has steadily been gaining contracts in the commercial sense since last earnings release, but its defense contracts have been lacking from what I can see.
3. BA has been branching out into space travel and is a growing competition with SpaceX in this area; however, they have yet to secure any formal contracts or any formal commercial plans as of yet.
4. Analysts expect BA's EPS to be positive this earnings date.
As such, I expect BA's earnings to be an improvement from previous earnings; however, I still expect BA to likely fall short of rainbows and butterflies. But I do expect the modest improvement in earnings to be a catalyst. BA investors (of which I used to be one) tend to expect bad news. However, when the news is less bad than usual, it generally sparks more interest. In general though, BA's response to earnings releases tends to be more tame than others unless they truly outperform, then you tend to get some aggressive bullishness. I look forward to seeing how this plays out.
Technicals:
- On the Daily and on the 1 hour you can see the bullish bird lead up.
- Right now BA is doing the pre-breakout dip. This is the make or break it portion of the bullish bird. Here, BA will either break to the upside or collapse back down.
- The pre-breakout dip can be aggressive but in this case it should not dip more than 148 - 149 to maintain the bullish bird pattern and break out. Any lower it is invalidated.
- RSI is running a little on the hot side on most major time frames including the daily which generally is sorted out with the pre-breakout pullback.
Trading Range
Predicted trading range is 142 to 173.
Verdict:
It could go either way with earnings and FOMC around the corner. Its a really hard call here.
But one important thing to keep in mind is BA doesn't follow SPY and generally trades independently of the market. It does lead DIA but it always managers to do its own thing and be independent of the market. So if and or when you trade BA, do not look to traditional indexes to guide your analysis because BA is a maverick in the same sense as TSLA.
My likely BA play:
Because of the crazy news being released and BA's inclination to break out to the upside of its range, my likely play this week is a straddle.
I will buy 1 weekly call and put on either end of the trading range (potentially 2 week) with an estimated net debit of about 0.94$ with the expectation that BA is going to break out one way or the other from its anticipated range as it has done for the last 2 weeks. Profits are technically unlimited but assuming that BA just reaches the top or bottom of the range and doesn't go higher or lower, net profit would be around 320 - 350. Obviously much higher if it surpasses the range like it has been lately (which is what I am hoping for). Conservative but this is an experiment as I have never tried something like this before. But with stocks constantly breaking through my ranges, this is an intriguing play.
That's it for now!
Trade safe everyone and leave your questions/comments and critiques below!
Thanks for reading
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