Boeing may reach support below $205 - $180, but I wouldn't like to bet that it will hold in the medium term.
Boeing was in bad shape even before this virus came along, but now the outbreak is getting very serious indeed AND it is worst in the state that they manufacture most air-frames. They also manufacture in California, which is well on its way to a outbreak of its own. I have been following daily updates on the spread of COVID-19 (since before it was called that) since 27th January and it was clear that we had almost no chance of containing it - but the response from the CDC has been woeful so far.
There is almost no question that;
1, The outbreak in Washington State is presently out of control - containment HAS failed,
2, this will significantly affect major manufacturers in the state - Boeing being the largest,
3, There is a possibility that some or all of those manufacturers in Washington State will be forced to deal with a temporarily reduced workforce and may have to down tools in large portions of production lines and may have to shutter whole factories for some time.
4, There also may be major disruptions to free movement incoming (the only avenue really left to stem the outbreak) so there is a real possibility that all Boeing manufacturing operations may at some stage be wholly paused.
Later on down the line, after the spread and the economic impacts has been more of a national scale will we know the full scope of this - in human and economic terms, but a deep recession seems almost unavoidable presently.
I want to be clear that despite the remaining down-side I will not short Boeing. There may be other Companies I refuse to short in the future, but for now I just can't bring myself to short Boeing. This is despite a significant portion of their troubles being from internal sources and that such troubles continue to be mis-handled. Too many people rely on their aircraft being supported adequately for many years to come. I hope that they emerge from this situation a stronger organisation.
Boeing was in bad shape even before this virus came along, but now the outbreak is getting very serious indeed AND it is worst in the state that they manufacture most air-frames. They also manufacture in California, which is well on its way to a outbreak of its own. I have been following daily updates on the spread of COVID-19 (since before it was called that) since 27th January and it was clear that we had almost no chance of containing it - but the response from the CDC has been woeful so far.
There is almost no question that;
1, The outbreak in Washington State is presently out of control - containment HAS failed,
2, this will significantly affect major manufacturers in the state - Boeing being the largest,
3, There is a possibility that some or all of those manufacturers in Washington State will be forced to deal with a temporarily reduced workforce and may have to down tools in large portions of production lines and may have to shutter whole factories for some time.
4, There also may be major disruptions to free movement incoming (the only avenue really left to stem the outbreak) so there is a real possibility that all Boeing manufacturing operations may at some stage be wholly paused.
Later on down the line, after the spread and the economic impacts has been more of a national scale will we know the full scope of this - in human and economic terms, but a deep recession seems almost unavoidable presently.
I want to be clear that despite the remaining down-side I will not short Boeing. There may be other Companies I refuse to short in the future, but for now I just can't bring myself to short Boeing. This is despite a significant portion of their troubles being from internal sources and that such troubles continue to be mis-handled. Too many people rely on their aircraft being supported adequately for many years to come. I hope that they emerge from this situation a stronger organisation.
Comment:
There might be a bounce soon to 200-240. Afterwards, hold your hats - this should head below $120
Trade closed: target reached
Comment:
It is looking like going lower
Comment:
Wow that's bearish
Comment:
I wouldn't be long Boeing right now. Will re-evaluate if it finds support below $80.