Boeing stock price continued its strong uptrend this month as investors placed their bets on its turnaround. It also jumped as market participants reacted to the report on the recent Air India plane crash. It was trading at $226, its highest level since January 11, and 76.2% above its lowest point this year.
Boeing dodges a bullet in the Air India crash
Boeing has been in the spotlight in the past few months as investors reacted to the recent Air India crash that led to at least 270 fatalities on June 12.
This crash was notable because it involved a Boeing 787 plane, a model known for its safety. As such, investors worried that the plane crash marked the start of a new crisis within the company.
However, there are signs that the company has been exonerated now that the preliminary report has been released. The report noted that the accident was caused by the fact that its two engines were starved of fuel shortly after takeoff.
The report cited a black box message in which one of the pilots asked the other one why he had switched it off. This pilot responded that he had not switched it on.
The pilots then turned the fuel supply switch on, and one engine started to relight, but it was too late. Therefore, there are indications that the accident could have been due to pilot error.
The alternative scenario is where the fuel control device is disengaged, which could push Boeing to offer a remedy.
Still, there are signs that the company has dodged a bullet, as this crash will not lead to a 737-Max-like crisis. The 737-Max crisis cost the company billions of dollars as the airlines were forced to ground their fleets. So far, no airline has paused its fleet, and the FAA has reiterated that the plane is safe.
Read more: ‘Who cut the engines?’: why experts can’t wrap their heads around Air India cockpit audio
Donald Trump and China trip
The other potential catalyst for the Boeing stock price is the upcoming Donald Trump trip to China. While details have not been released, analysts anticipate that the trip will happen by October.
Jensen Huang, NVIDIA’s CEO, has scheduled a meeting with the president to discuss the trip. He will likely lobby the president to end his embargo on chip shipments to China.
While nothing has been confirmed yet, there are odds that Boeing’s CEO will join Trump in the trip. A potential catalyst would be that China may decide to place a huge Boeing order as it works to repair its relationship with the US.
Earnings ahead
The next important catalyst for the Boeing stock price is its earnings, which will come out on July 29. These results will provide more color about the company’s turnaround.
Analysts expect the upcoming results to show that its revenue jumped by 19% YoY to $20 billion, while its loss per share improved from $2.9 to 94 cents.
They also expect its revenue to move to $21.25 billion in the current quarter and the EPS to move from a $10 loss to 34 cents. Boeing is also expected to narrow its loss this year from $20 to $1.78 and then make a profit of $4.16.
Boeing stock price analysis
The daily chart shows that the BA share price bottomed at $128.37 in April and then jumped to nearly $230. It formed a golden cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA).
The stock moved above the 61.8% Fibonacci Retracement level at $214, while the MACD and the Relative Strength Index (RSI) have all pointed upwards.
Therefore, the stock will likely continue rising as bulls target the key resistance level at $250, up by over 10% from the current level. A drop below the support at $218 will invalidate the bullish view.
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