Boeing presented its quarterly report on April 27. The company's results disappointed investors, the shares dropped 7.5%. And even yesterday's powerful pullback of the entire U.S. market (the S&P 500 flew up 2.5%) did not help, Boeing continued to decrease.
Considering the company's report, the market participants' pessimism is understandable. Revenue dropped 8% to $13.99 billion, much worse than the forecast of $16.02 billion. The loss per share was - $2.75, also much worse than expected at - $0.25.
Previously, it had been expected that the passing of the coronavirus pandemic acute phase would cause an increase in demand for aircraft, and aircraft manufacturers would be able to return to normal operations. And production is really recovering: 95 aircraft were delivered to customers in the quarter (it was 77 a year ago). But there is no positive impact on the financial results, because the costs grow along with the growth of production volumes.
A 40-year record inflation rate is extremely negative in itself, but the situation is even worse for Boeing. In March, the company stopped buying titanium (the most important material for aircraft construction) from Russian producers. Previously Boeing purchased about a third of the titanium it needed from Russia, and now it is forced to look for new suppliers. And it is probable that these new supplies will be much more expensive than before.
Sales after the quarterly statement allowed the price to close the gap from November 2020 at 157.6 level. The further decrease aim will be the fall minimum of 2020. - The 141.4 mark. The RSI has not yet entered the oversold zone and allows the continuation of the fall.
At the same time, the last 2 day candlesticks formed "hammers", which means that the "bulls" can temporarily take the lead. It is possible to wait for an attempt to close the gap at 166.8, and then sell from there.
The following trading strategy options can be offered:
1) Selling of Boeing at the current price. Take profit 1 – 149,4. Take profit 2 – 141,4. Stop loss – 160,5.
2) Selling of Boeing on a upside jump at the gap that formed at 166.8. Take profit – 149,4. Stop loss – 173,3.
Also, traders in their discretion instead of a fixed Stop loss can use Trailing stop when the price goes down.