The Boeing Company (BA) - January 15, 2024

DAILY STOCK REPORT: THE BOEING COMPANY (BA)

Boeing (BA) shares sold off last week, losing 12.4% following an in-flight mechanical incident that led to the grounding of the 737 Max 9 fleet. This selloff caused BA shares to tumble down the rankings in the SIA S&P 100 Index report, falling out of the green zone and into the Yellow Neutral Zone after a decline of 39 spots to 43rd place over the week, including a drop of 18 positions on Friday.

This is not the first time that safety problems with the Boeing 737 Max series have led to widespread groundings, the company’s management/engineering/manufacturing processes, priorities and effectiveness being called into question and a significant loss of investor confidence.

Following two fatal crashes of the 737 Max 8, which led to many groundings and investigations, BA fell out of the green zone in March of 2019 and by March of 2020 it hit rock bottom in the SIACharts S&P 100 Index Report. Over that year, the shares lost 73.5% of their value. Between 2019 and the end of 2022, the shares spent most of their time in the red zone with the occasional brief pop up into the yellow or green zones. The shares did not make a sustainable run of more than a few weeks into the green zone until 2023, nearly four years later.

Candlestick Chart Gaps Down:

January of 2024 is looking like March of 2019 all over again for Boeing (BA) shares so far. In 2019, a big run up came to an abrupt halt as the shares staged a breakaway gap downward on a volume spike and dropped under their 10-week moving average. The shares subsequently embarked on a long-term downtrend that didn’t really come to an end until October of 2022.

This month, upward momentum in BA shares was already slowing following a big run, and then the shares once again staged a breakaway gap downward on a volume spike taking out their 10-week moving average, a sign of a negative shift in investor sentiment and accumulation flipping over to distribution.

Next potential support for BA may appear near the $200.00 round number, or the October low near $180.00. Initial resistance on a bounce appears near $135.50 where the 10-week moving average and the bottom of the gap converge.

Point and Figure Chart Echoes the 2019 Bearish Downturn:

Recent trading action in Boeing (BA) shares is eerily similar to their previous peak in 2019. Following a big high pole rally that took the shares to a new 52-week high, Boeing staged a 9-row initial reversal following the second 737 Max 8 crash. This month after a big high pole rally that took the shares to a new 52-week high, Boeing has staged a 9-row initial reversal following a 737 Max 9 safety incident.

In 2019, the shares never really bounced back and remained under distribution, in steady decline for a year until really going off a cliff in the 2020 bear market. From the March 2019 peak to the February 2020 bearish Double Bottom signal, BA lost 28.5% of its value.

A decline of one more row and a close below $216.70 would trigger a bearish pending high pole warning on BA shares. Next potential downside support tests appear near the $200.00 round number, followed by a spring low near $192.40 and then the October low near $174.30. Initial resistance on a bounce may appear near $239.30 based on a 3-box reversal.

With a bearish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 5 out of 10, BA is exhibiting short-term weakness against the asset classes.