Big Order Sends a Strong Bullish Signal for Boeing Traders

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If you’ve been in the markets for a while, you might recall a time when Boeing (NYSE:BA) was considered a safe investment. This year proved though, that nothing is completely safe in the markets – not even Boeing stock.

Image of Boeing (BA) airplane in a hanger.

Source: Alex JW Robinson / Shutterstock.com

With the aviation industry battered by the onset of the novel coronavirus, it’s been quite challenging for Boeing to maintain steady revenue sources. If there are no new orders for planes, Boeing’s very existence could be jeopardized.

Folks who have stayed the course and stood by their investments in Boeing stock deserve respect. They survived what might be the worst part of an unimaginable pandemic-induced crisis.

Today, there’s light at the end of the tunnel and hope that Boeing might thrive again. Indeed, a recent order should remind the skeptics of Boeing’s iconic status within the aviation market.

A Closer Look at Boeing Stock

The story of Boeing stock involves a rise, a big fall and hopefully, another rise to its former glory.

For instance, 2017 was an absolutely amazing year for Boeing shareholders. It was a year that was ripe with optimism as Boeing stock nearly doubled from $160 to the $300 level.

Then came two full years of sideways churn. Sometimes that’s how the markets behave as big moves can be followed by digestion/consolidation periods. During this time, investors’ patience is tested and some folks just give up.

That’s a real shame because there’s an old saying: the longer the base, the higher in space. Yet, tragedy intervened as the Covid-19 crisis precipitated a sharp sell-off in Boeing stock.

This explains the stock’s eye-popping 52-week range of $89 to $349.95. Still, as of Dec. 23, Boeing stock was trading close to the $220 area. This indicates that the share price may have stabilized somewhat, or at least it’s not plunging.

Could the Boeing stock bulls bid the share price to the $350 level again? Sure, if the company can build and sell more planes – and there’s evidence that Boeing’s already making serious headway.

A Timely Order

Boeing’s 737 Max jet has had its fair share of controversy. Even prior to the Covid-19 pandemic, you might have heard commentators suggesting that Boeing should retire this jet model.

Moreover, the orders for the 737 Max jet had declined by nearly 1,070 through November. Thankfully, the story of the 737 Max doesn’t have to end here.

After a 20-month safety review process, Federal Aviation Administration (FAA) Administrator Steve Dickson finally signed an order on Dec. 18 that, according to the FAA, “paves the way for the Boeing 737 MAX to return to commercial service.”

Then, on Dec. 2, Irish budget airline Ryanair Holdings  (NASDAQ:RYAAY) ordered 75 of Boeing’s 737 MAX jets with a $9 billion list price. This was the biggest overall order of 737 MAX jets since they were grounded in 2019.

A Strong Partnership

After the FAA’s green light and Ryanair’s order, another large order came in. Specifically, on Dec. 22, Alaska Air Group (NYSE:ALK) ordered 23 of the Boeing 737 Max jets.

With that, Alaska Air Group has 68 Boeing 737 Max jets on order plus 52 of the jets on option.

Clearly, Alaska Airlines CEO Brad Tilden is standing by Boeing despite the challenges presented by the Covid-19 crisis.

“We believe in this airplane, we believe in our strong partnership with Boeing, and we believe in the future of Alaska Airlines and the incredible opportunities ahead as we climb our way out of this pandemic,” said Tilden.

Thus, we can discern the domino effect of one positive development after another. The recent 737 Max orders should provide revenues for Boeing, and just as importantly, confidence for the shareholders.

The Bottom Line

It’s encouraging to witness Boeing, an American icon in the aviation market, making progress in late 2020.

In light of this, Boeing stock holders should stay the course in anticipation of a turnaround and, eventually, a return to all-time highs.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.


Article printed from InvestorPlace Media, https://investorplace.com/2020/12/big-order-sends-a-strong-bullish-signal-for-boeing-stock-traders/.

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