Since March 2020 — each time this stock has dropped below the the low trend line for multiple sessions – it becomes oversold for a few trading days (thin green buy line) – some positive news is released – and then once it recovers back to the thick Green Buy Line it… lift off. Personally – I’ve made over 200k Trading in this strategy since the start of the pandemic. I never traded options but I thought the virus was going to go away within a few months and air travels returns to normal… so I took my 40k Bonus and slammed it into calls that expired over the summer of 2020.
My thesis couldn’t have been further from the truth but I was getting paid and making a shit ton of mistakes. I started educating myself and uncovered this trading pattern in the BA stock Price. Each time the low green trend line is crossed – I would buy options 2 – 6 months out- wait for the pop – net out my cost basis when it does and sell once the stock price makes it way back to the upper threshold.
Question is what will be the gasoline for this particular fire? Can the technical analysis alone push this thing higher? The answer is negative — needs to have a catalyst but I think what the hedge funds have done with their influence is set this thing up perfectly for a nice run.
Bid Media decides to lead with Hawaii crash story the day before United order announcement sending this screaming down through my “buy” line. Engine failure doesn’t on an ancient Boeing Plan shouldn’t extinguish the value in United Order but stocks down significantly since then. Chinese step to approval could end poorly – they’re commie bastards who want to use it as leverage while they try to steal the tech and create their own competitor but an approval is way overdo and in China’s best interest in the short term to keep the peace.
The most recent “NEWS FLASH” to drive this down was the “787’s New Productions issues” — Boeing is extremely susceptible to the headlines and if you don’t think those with influence are not using their chips to set up their portfolios’ — you live in a dream world. We all knew there were multiple productions issues with the 787. This particular issue sited really falls on spirit and does not affect the flight safety. How does it change the fundamentals of this company?
Earnings — There’s a lot of momentum from Q2 and sales were above estimates on the max and on the contracts they pulled in. Will be important for Boeing to address the production “Issues” and China but any positive news or a double beat could start to propel this as well. Great news about all these seemingly well placed headlines — Headline risk exposure to the downside (Over 12% in last 2 weeks) also means headline exposure to the upside is on our side.
What would we need for a 10-15% bounce back to erase the 2 weeks loss:–Any report stating Boeing was not at fault on the Hawaii crash– Chinese Approval– Positive Earnings Report– Update on 787 production and expected resolution date – expected return to full production. Teeth have been kicked in the last two weeks. Any time I get away from thesis – it goes sour. The 8/20 235 – 250 C and 10/15 240$ – 270$ C options look like the best play short term with the 8/20 Calls having the highest risk reward. 1/1 Calls are at quite the premium but the $270 – 300$ but IMO – the Probability that BA busts through 270$ before Labor Day and past 300$ before EOY is extremely high.