I haven't traded BA since my previous idea, but I have been watching it sort of. It has been selling off with the rest of the market and thought I would update as to where I see it going.
I will cover both short (next week) and long term. I am watching BA very closely because, if you didn't know, I like the stock. I am an ex-Boeing investor and am anxious to re-invest and just write covered calls on this company. But I do have a target price for when I will begin re-investing and I will cover all of that in this post.
Brief Recap
So as I said, BA has been tanking with the rest of the market. I have been avoiding BA for the time being because my prob models on it were quite positive actually and had very optimistic projections, but in the larger context of the market it really didn't stand a chance. Alas, here we are.
But basically, BA has been traveling in a descending channel. It hasn't really been doing anything overly interesting, just sort of making its way down this channel. I suspect it to continue and where things get interesting is there is a key support line that BA is approaching (see chart below):
This support line essentially extends from the COVID crash, we made 1 test of it on the initial sell down and BA is on its way back towards it. Support from this line is around the 110s (114 ish).
BA is currently resting at the bottom of its descending channel and it is fast approaching this major support line.
As well, BA has fallen out of its monthly trading range and surpassed all 3 monthly bear targets.
BA Outlook
BA is a really disastrous stock. It is actually one of the worst stocks I have seen. It has quite an erratic growth line. I have shown this before, but here is a current snapshot of BA's time series chart:
BA had this random parabolic run between 2018 and 2020 and then never quite recovered post pandemic. Why? I am not sure actually, but I suspect it has something to do with BA's fundamentals. It is a fundamentally flawed company unfortunately, and I think if it wasn't for the fact that it essentially holds a duopoly and many government contracts it would have gone bankrupt ages ago. Mind you, EADSY (Airbus) has a similar looking chart (as does ITA) so it may just be aerospace specific.
But ultimately its neither here nor there. All we care about is where is BA headed? Short term, I think BA is in for a bounce and long term, BA has a bit of a ways to fall. So let's get into the numbers.
Next Week
So because BA is at the bottom of its descending channel, it is oversold, etc. etc. BA very well may get a reflexive bounce here. However, I think the market is still heading down a little sooner than maybe most people think so I actually wouldn't personally play a bounce here (maybe as a day trade but there are better stocks to day trade for a bounce), but I will give you the mathmatical bull and bear targets for BA next week:
Bull Targets:
1. 131.86
2. 137.56
3. 143.26
Bear Targets:
1. 126.53
2. 120.47
3. 114.41
Which are likely?
Well, I do find it interesting that the 3rd bear target is actually around where that support line is. So that is something to keep in mind and also one of the biggest reasons I am not over-zealous here about a possible bounce.
That said, I do forsee some upside going into the beginning of the week, I just suspect it to be short lived and I really don't foresee BA surpassing its 2nd bull target, if its lucky enough to get there.
My mid term target here is the 114.
Where is BA going?
Its really hard to say because it is such a disaster stock. I have time series modelled BA but its quite challenging for BA because BA has historically traded so poorly and erratically. But essentially, running time series based on the chart I showed you above, we get a projected range for the next month of $96 - 146.
This actually corresponds to my initial thinking some months ago when I suspected BA was heading for the double digits. It never quite got there, but I figured it, along with SPY, would make another running attempt at attaining those double digits. And time series seems to agree with me here this time.
My personal target:
My personal target on BA is in the double digits ($96). I suspect us to see that $96. Potentially lower, but BA going very much lower than that would be pushing it into massive negative growth and would signal that the company is truly fundamentally flawed. But this would not surprise me because like I said, BA is a fundamentally flawed company. I still stan them though.
96 is where I would begin to re-scale into my longer term BA position (As an investment not a trade). I would scale if the stock continued to drop, but it wouldn't concern me as much as the plan is to write calls.
Summary:
So, in a nutshell here is the takeway:
- Overall bearish bias here; save for a reflexive bounce that is likely. For fellow day traders, I would be looking for that on Monday. For Swing traders, I would be looking to potentially open a short position next week after a minor bounce.
- Mid term target is 114.
- Long term target is 96, potentially lower.
I will cover both short (next week) and long term. I am watching BA very closely because, if you didn't know, I like the stock. I am an ex-Boeing investor and am anxious to re-invest and just write covered calls on this company. But I do have a target price for when I will begin re-investing and I will cover all of that in this post.
Brief Recap
So as I said, BA has been tanking with the rest of the market. I have been avoiding BA for the time being because my prob models on it were quite positive actually and had very optimistic projections, but in the larger context of the market it really didn't stand a chance. Alas, here we are.
But basically, BA has been traveling in a descending channel. It hasn't really been doing anything overly interesting, just sort of making its way down this channel. I suspect it to continue and where things get interesting is there is a key support line that BA is approaching (see chart below):
This support line essentially extends from the COVID crash, we made 1 test of it on the initial sell down and BA is on its way back towards it. Support from this line is around the 110s (114 ish).
BA is currently resting at the bottom of its descending channel and it is fast approaching this major support line.
As well, BA has fallen out of its monthly trading range and surpassed all 3 monthly bear targets.
BA Outlook
BA is a really disastrous stock. It is actually one of the worst stocks I have seen. It has quite an erratic growth line. I have shown this before, but here is a current snapshot of BA's time series chart:
BA had this random parabolic run between 2018 and 2020 and then never quite recovered post pandemic. Why? I am not sure actually, but I suspect it has something to do with BA's fundamentals. It is a fundamentally flawed company unfortunately, and I think if it wasn't for the fact that it essentially holds a duopoly and many government contracts it would have gone bankrupt ages ago. Mind you, EADSY (Airbus) has a similar looking chart (as does ITA) so it may just be aerospace specific.
But ultimately its neither here nor there. All we care about is where is BA headed? Short term, I think BA is in for a bounce and long term, BA has a bit of a ways to fall. So let's get into the numbers.
Next Week
So because BA is at the bottom of its descending channel, it is oversold, etc. etc. BA very well may get a reflexive bounce here. However, I think the market is still heading down a little sooner than maybe most people think so I actually wouldn't personally play a bounce here (maybe as a day trade but there are better stocks to day trade for a bounce), but I will give you the mathmatical bull and bear targets for BA next week:
Bull Targets:
1. 131.86
2. 137.56
3. 143.26
Bear Targets:
1. 126.53
2. 120.47
3. 114.41
Which are likely?
Well, I do find it interesting that the 3rd bear target is actually around where that support line is. So that is something to keep in mind and also one of the biggest reasons I am not over-zealous here about a possible bounce.
That said, I do forsee some upside going into the beginning of the week, I just suspect it to be short lived and I really don't foresee BA surpassing its 2nd bull target, if its lucky enough to get there.
My mid term target here is the 114.
Where is BA going?
Its really hard to say because it is such a disaster stock. I have time series modelled BA but its quite challenging for BA because BA has historically traded so poorly and erratically. But essentially, running time series based on the chart I showed you above, we get a projected range for the next month of $96 - 146.
This actually corresponds to my initial thinking some months ago when I suspected BA was heading for the double digits. It never quite got there, but I figured it, along with SPY, would make another running attempt at attaining those double digits. And time series seems to agree with me here this time.
My personal target:
My personal target on BA is in the double digits ($96). I suspect us to see that $96. Potentially lower, but BA going very much lower than that would be pushing it into massive negative growth and would signal that the company is truly fundamentally flawed. But this would not surprise me because like I said, BA is a fundamentally flawed company. I still stan them though.
96 is where I would begin to re-scale into my longer term BA position (As an investment not a trade). I would scale if the stock continued to drop, but it wouldn't concern me as much as the plan is to write calls.
Summary:
So, in a nutshell here is the takeway:
- Overall bearish bias here; save for a reflexive bounce that is likely. For fellow day traders, I would be looking for that on Monday. For Swing traders, I would be looking to potentially open a short position next week after a minor bounce.
- Mid term target is 114.
- Long term target is 96, potentially lower.
Premium indicators and content have launched! Get access at: www.patreon.com/steversteves
Just wanted to get that out there haha.