Lol, BA. What a nightmare stock. But I still love it.
But let it be a cautionary tale to everyone, myself included. Never forget fundamentals. They matter. I am a hardcore BA stan. As a rule, I am never bearish on this stock. However, traditionally that has screwed me. Now the inverse has happened. I am an ex BA-investor. I bailed just before the crash because BA had under-performed dramatically through 2021/2022. My plan was to re-invest when it dropped to the low 100s. But then, according to TA, I figured I would wait till the double digits. Because it was supported by math, and TA and everyone else was saying it. So despite me having an urge to load up on BA shares at 114, I was like "Nah nah, let's wait till the double digits".
And this is what happened.
And so, BA serves as the ultimate cautionary tale. Don't forget, there is more to stocks than TA. Fundamentals really do matter. BA recognized that its stock was under-performing and actually kicked up its game, hosting investor meetings and sessions and delivering plans on how it was going to get its SIT together and stop under-performing as a company. Since then, BA has been on a rampage where its finally living up to its FMV and analyst projections.
The question become whether BA ca deliver on these promises. And that is yet to be seen. But the moral of the story still stands. Me and everyone else shilling BA in the double digits have been slapped and put in our place. Because BA has sure shown us.
And it kills me, because like I said, BA stan here. Like, BA to me is what TSLA is to those Elon stans. I own BA merch (My fav sweater is a BA logoed sweater and I even have a BA coffee mug in my actual work office). Prior to me selling, I owned roughly 520 BA shares (which I bought on the COVID crash on an avg of 102). I love the company. Not so much the CEO, but the company and have high hopes for it. And now, I am in a really terrible place because I am not invested in a company I truly believe in, and right now the stock is like doubled my initial investment before I sold. Its quite the moral dilemma and I am really kicking myself for this huge mistake of life.
Will it come back down? Maybe..... it depends on what I mentioned before. Whether BA can actually deliver on its promises to investors. I have hope this will still tank. I will not make the same mistake twice. I see BA 120. I buy. I see BA come down more to 110? I buy a ton. BA finally makes it to the double digits? I re-mortgage and buy my house worth of BA stock. :-).
But let's talk about what's right in front of us and what to expect next week.
Analysis:
BA remains in this uptrend that it has established since September of last year. Pearson correlation on this trend as plotted in SPSS is 0.966 on the hourly. My initial suspicion I discussed in my last BA idea was correct. This was indeed a break up pattern. :(
We are approaching the top of the up-trend. The mean currently is at 205. We closed at around 213 and BA continued to sink a bit in after-hours to around 212. BA is also at the top of its monthly predicted range.
You may see that yellow line and be like "Oh! 99% target?" And no. Unfortunately its not. BA has a rocky trading history and I have not been able to establish a 99% target on it like I have on SPY, QQQ, DIA, etc. I have, however, been able to establish a 99% target on the weekly. But we won't know that until Monday. I do have a 76% target over the next 2 days. That target is 213. Meaning we porbably will see 213 again before any tanking. If we open above 213, then it would likely be a short.
So what to expect this week? We really should see BA pullback to 205. According to its uptrend, anything over 213 is technically a short on the weekly and anything below 200/199 is a long. BA is hit and miss in its momentum. So if we see some good momentum come in this week, we may get some good plays on the day.
EDIT There is potential for some major pullback down to the bottom of the range. If we see 199 broken, then I would suspect BA is going to re-test the bottom of its current uptrend. It really all depends on the momentum we see. Either way, currently, I think its a short to at least 205 for a cool-down.
My thoughts, not advice!
Safe trades everyone!
Comment
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So I shorted... again lol.
I didn't hold right till 205, I took profits at the 99% target because shorting BA when its this bullish is just painful and nerve wracking.
But happy to see that this did in fact hold true to the calculcations. Also really happy to see that my original calculations were correct (when I was calling for 197) but the timing was just off.
Not mad at it. Will revisit this next week. While this technically went to that long zone (the low 200s/199), I wouldn't advise trading this till post CPI. Just my thoughts.
I gave up on trying to make sense of this market and I just go with the flow! LOL thx
JB7oh2
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I love BA it does what it wants it has relative strength in the market doesn’t matter if the naz is down or up. I’m super curious what this year will bring
Steversteves
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@JB7oh2, Same! A lot of people think it follows the market but this year alone, it has deviated far from the market, decreasing its pearson correlation from roughly 0.7 to roughly 0.5 in relation to SPY. I am planning on doing a post that looks at BA, GNRC, TSLA, MCD, DIA and SPY in standardized statistical form (via z-score) plotted over 2022, to show how, just because we are in a bear market, doesn't mean everything a) tanks equally, b) tanks at all, c) follows the market and that d) fundamentals are important even more than technical analysis. Its obviously a hugely labour intensive post, I have done the data collection, just need to run the numbers and do the charts and then write the post. But I think it will be interesting! Thanks for the comment man :-)!
JB7oh2
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@Steversteves, that sounds awesome maybe do it in video write down some points to stay on track, typing all that up is a pain
Hey Steve! You probably don’t remember me, but I used to be here a lot as a super BA bull, along with other travel related names. But with two toddlers, and busy work load haven’t had a chance to come here and stress people out lol. What a crazy year for BA and the market in general. I wish I added more when it was really down, but having roughly 2,000 shares at $125 cost basis was enough for me and concentration risk. Still hoping to hit my target of $275, $300 and $330 at some point. Hope you are doing well and I wish you a very happy new year!
wurth.sg
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Great post, many thanks for sharing.
ElliottOFKentucky
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Will new speaker deal to cut defense contract affect the market
Steversteves
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@ElliottOFKentucky, The market or BA itself? It will affect BA, but in what way, I don't know. BA investors tend to be more hardy and resilient than other investors. Negative news and poor earnings will cause an initial knee jerk reaction but then it will quickly get bought up. Its kind of delicate in how you interpret news for BA. It has to be pretty damning for BA to see a major move to the downside. This is just my experience as an ex-ba investor.
Bigloss109
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BA is probably one of the few mega monopoly companies which the fed will always bail out to avoid collapsing the economy. Could never go wrong buying shares. Ngl I’m surprised they bounced so hard, haven’t kept up with fundamentals but I’m assuming their plans stopped exploding lol. Anyways, I think as recession/depression manifest in next years and business slows it’ll be a good stock to pick up. It’ll go down just like everything else will. Kinda insane though it formed a double bottom with 2020 levels, going parabolic rn. Maybe they did change lol. But I think we see at least another revisit to the 120’s for a triple bottom.