In today’s edition of the Daily Stock Report, we are going to feature The Boeing Co. (BA). The last time we looked at Boeing was Jan 15, 2024, when the shares had just entered the Neutral Zone with a RED SMAX in the SIA S&P 100 Index report at a price of $217.70. At that time Boeing (BA) shares sold off losing 12.4% following an in-flight mechanical incident that led to the grounding of the 737 Max 9 fleet. This is not the first time that safety problems with the Boeing 737 Max series have led to widespread groundings and raised concerns about the company’s management, engineering, manufacturing processes, priorities, and overall effectiveness; resulting in a significant loss of investor confidence. As such, the SIA Platform issued its call to action that it was time to look for other opportunities when the Neutral Zone with RED SMAX signal triggered.Typical investor behaviour may be to pick up a position on this name as the shares trend down with the mindset the negative news will pass, and a “value” play is materializing particularly if one had experienced a gain on the shares and were looking to add to the position. However, in looking at the attached relative strength matrix position chart of Boeing in the SIA S&P 100 index report, we see Boeing never re-entered the favored zone even to this day. In fact, the shares deteriorated further into the unfavored zone, with a brief rally into the neutral zone earlier this year only to succumb to the selling pressure once again and falling back to the unfavored zone. This exemplifies SIA’s “rules based” methodology of only looking at names in the favored zone and look for other opportunities when names are in the Neutral and red zones. As the saying goes “Don’t fall in love with a stock as the stock won’t love you back”. It is essential in successful investing to remove emotion out of the equation and instead apply a “rules based” discipline, such as when Boeing left the favored zone on January 15, 2024, at a price of $217.70.In today's review we see the shares have exhibited a steady downtrend since January 2024. A new low was established earlier this month at $128.00 with no real bottom being formed as of yet, despite the shares currently rallying from that earlier month new low. To date, since our last update back in Jan of 2024, the shares are down 34% in over a year’s time with the previous day’s close of $161.90.
In looking at the Point and Figure Chart, we see the stock has been in a steady downtrend since the January 2024, peak which is still intact today. The shares did briefly rally earlier this year but could not break above its long-term downtrend line and the prevailing trend (downwards) re-asserted itself. A new low was established by one box earlier this month when the shares touched $137.44 and now a rallying column of X’s is currently being exhibited.
It is much too soon to say the trend has finally changed to the upside, as a trend change is still not confirmed until it breaks above the long-term downtrend line currently at $181.34, which will act as hefty resistance just as it did earlier this year. Prior to that resistance level, the shares may encounter earlier resistance at the $174.30 area. Support can be found at its 3-box reversal of $148.77 and, below that, next support is the most recent low of $134.74. With a SMAX of 6 out of 10, the shares are exhibiting a bit of short-term strength against the asset classes, so it will be interesting to see if this short term strength can materialize further or if the shares will once again succumb to its predominant downward trend. Only time will tell.
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