BA- Are you Boeing up, sir?

Research & Analysis Swing Trades
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Starting a thread on Boeing (#ba) as I’ve been hearing multiple rumors (emphasis on rumor) that Boeing has acquired some big military contracts that haven’t hit the news yet, possibly from or through LMT (My friend’s guy…yeah yeah, I know…claims LMT defaulted on a contract and it was given to BA, and was also saying something about unusual shipping labels from LMT->BA. Will update this as I get some clarity on all that).

I’m still digging into the veracity of the rumors, but even from a technical standpoint, BA looks to be ready to pop into one of it’s uptrends on the daily time frame, and as far as sentiment…well, they make weapons during war. LMT has had everyone’s eye lately, so I also hope for some OI coming in on aircraft ticker fever. We’ve all seen how volatile these war time tickers can get, but I’m confident enough looking off the chart to open a position.

So far took just one 3/18 180c @$4.75 for a swing based on chart technicals this week, but as far as a possible news run goes, obviously further out dates are better, my real goal here is gonna be to build out a position for April or May before the (alleged) news hits. Again, I cannot stress enough that as of now these are just rumors, play accordingly

News dumps-

Bullish
“BA ‘misunderstood’ by market as civilian aircraft manufacturer”, while 40% of sales come from defense contracts (expected to rise)-

www.seekingalpha.com/amp/article/4494168-ukrainianrussian-conflict-and-impact-on-defense-stocks-boeing-and-lockheed-martin

Neutral

FAA finalizes Boeing 777 safety directives after fan blade failure (bearish issue, neutral-bearish resolution)

https://www.reuters.com/business/aerospace-defense/us-faa-finalizes-boeing-777-safety-directives-after-fan-blade-failures-2022-03-09/

Bearish

Boeing worried about missing key 737 Max certification (bearish, especially while the market still views Boeing as mainly commercial)

3-13: Slow, Neutral-Bearish news this weekend, most revolving around the EoY deadline for the 737 MAX certification

(Website is an asshole with AdBlock on) Interesting in that it concentrates on the executives’ options expiring worthless, strange spin to put on it
https://www.seattletimes.com/business/boeing-aerospace/despite-boeing-woes-executives-get-big-paychecks/

An anonymous BA insider says there’s ‘no way’ they meet the deadline
https://www.airwaysmag.com/industry/boeing/boeing-737-10-cert-deadline/

A few more like that, a couple with the helpful reminder that last month Netflix released a documentary about Boeing crashes :sweat_smile: Looks to remain neutral bearish for a bit, will watch PA this week to potentially play downward movement, as this downtrend is likely to continue until a catalyst comes through, catching that catalyst as early as possible is the goal here

Will add more as I see it, though remember this is going off anticipated news, not current. Watching $178-$180 to sell the 3/18, and $165-$175 on pullback for Apr/May entry

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Nice find. Looks to be finding support at that $178 level. I agree with you though, looks like a potential downtrend and more bullish for Apr/May.

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Thank you, buying here was definitely a bit risky, and there were better entries after the noon ‘dip’ I bought on, but that uptrend and support was what I was hoping to see for this particular buy, broke out of a flag I had drawn right around EOD.

I’ll be cutting the 3/18 tomorrow for sure on sign of a trend either direction, as holding over the weekend would need a very large move upwards ($181+ to retain current value) compared to tomorrow, where there’s about a 33 cent move per contract for every $0.50 of the underlying. That’s a pretty good risk reward for an overnight for me, and I wanna get a feel for how the ticker and contracts move before building out a position on a pullback for that hopeful larger scale pop going into spring.

Edit- Ah, right, why I’m even gambling on a pop tomorrow…I think today’s drop was profit taking from yesterday’s pop at open, but the fact it didn’t fall through $175 gave me confidence that enough people were buying to keep it going, $175 is a nice psychological number too. Volume looked pretty good too, though I only really have access to very basic Lvl. 2, nothing much fancier… The AH movement staying up and building support is making me feel nice as well, as this ticker does regularly see multi dollar opens/morning runs, but I won’t bust out the hopium here lol

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And there was the pop I was looking for at open, took profit on the 3/18c @$6.85, +$2.10 on the contract. $7.10 would have hit, but just barely, so I’m happy with where I lay my Limit. Wasn’t holding out for a morning pump as this gap up was huge in terms of contract value, and those 3/18s will rapidly decay (check the optionstrat on those if you’re bored and want a high risk high reward laugh), today was really it to really be profitable on them :pepepray: Watching that 165-170 level for re-entry

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This is a very interesting trade to me, given that in the near term (next few months to year) BA will be weak due to the bearish news you’ve listed, and a possible slow down due to commodities pricing on consumer spending - look at how bad JETS is performing right now… Still if you are thinking BA will get a move similar to how LMT has done over the last few weeks, I think you could get away with a trade reentry as a diagonal spread. Currently, and especially due to the SPY selloff on Friday, there’s an expected move of about +/-5.5 on the ticker for next week. If you’re thinking pricing decays out next week could you work in a diagonal spread: 175 Mar 18/170 Apr 14 for a total cost of 8.33 per contract? This would, if played out properly, let the sold weekly 175 expire worthless while having you in the April contract immediately. As earnings are end of April that still prevents you from buying into the earnings runup that will happen with the two weeks after OpEx.

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Forgot to tell you I bought in Thursday and sold at open yesterday for 50%. Thanks dude.

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A friend of mine was recently hired by Boeing specifically to work on a new project involving missiles.

I know nothing more than that information. Kept under wraps.

That being said, something like this in its infancy may not see the light of day for several years.

With recent ape energy and interest running things like LMT, it important to remember government contracts and sales of things defense related are no like other products. A government contract for, say, 50 of these missle systems, may mean the government directly funds Any R&D involved in the making of the product, but actual creation/distribution of the product under the same contract may not come into fruition for many years. It could also mean Boeing has to pay for the R&D, which would actually be financially bearish news to front the cost of development and recieve no payment until product delivered. while contracts are bullish news, the actual financial gain from them as it pertains to earnings and revenue are, for lack of better terms, a cluster fuck.

They are developing something, though. My guy is legit.

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This is a fantastic idea with lots of potential, thank you for this! I’ll definitely be watching the charts, news, and working on some strategies in optionstrat to find the optimal strikes for the sold leg after seeing what kind of movement we open the week with, really the biggest risk on this would be news pushing it into a run or gap up EoW, but I like this, I’ve been meaning to run these kinds of spreads/the wheels etc.
I’d have to check the others but I know the decay on those 3/18 175s get real bad over the next week, they’ll need $181.50 on BA to see green at expiry, 181 on the dot is still negative, unless IV just goes beserk…betting on not seeing 181 again this week is a little risky right now seeing as a little bit of support got built out around $175 the past few days, but this is also at July-Oct lows, if it does fall through $170 to $160-$165 this week I think it’d be pretty difficult to make it back above $180 before Friday, while offering optimal entry for later dates and a hopeful swing back up

Edit 3/12- Ah, right, I won’t have the collateral for the sell leg this week unfortunately :sadge: But looking at it, if anyone goes for it, I agree the 175s look best, with each strike above and below holding quite a bit more/less risk/reward. Play that accordingly if you go with the spread, and I will try to keep that portion in mind when watching the chart on TF this week. Here’s fucking hoping RSX and OZON finish their bullshit by Friday, losing what I have wouldn’t kill me, but winning what I’m due should allow for this kind of thing. Biggest :pepepray: ever

@MENoir Hell yeah dude, that’s awesome to hear! Hopefully it’s just getting started for this one :cheers:

@anon59732070 I wouldn’t be surprised if that’s the same rumor that made it’s way around to the creation this thread, but yeah it’s not so much playing the potential contracts themselves, more a ‘sentiment squeeze’ from that or other info making it’s way to the mainstream outlets with the war on, that’s what I’m really looking out for between now and summer. I don’t really see this as ‘the next LMT’ or anything, but I do think there’s enough people in this market who would think exactly that on some news for this to be a profitable play. Not discounting the other side either, if it falls through that support (or really really runs, like toward $190-$200), puts could be on the menu too

Admittedly a lot is up in the air and up to sentiment on this one, I could go find what I wanna see in the charts but instead I’m gonna try and look for correlations, multi dollar gaps up and down are common with this ticker, I want to find a common thread/catalyst between those ups or downs if I can

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Not too much going on with this today, almost grabbed a call to start the spring/summer position on that double bottom at $172 but it wasn’t quite all there for me… it’s possible it pops up closer to $180 tomorrow at open after that uptrend EoD and an ITM call would’ve paid, but still eyeing ~$165, the chart, and news for entry into the further dates

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Well, looks like calls off that $172 point would have been the way to go, I’m not quite sure why this ran so much today. News is bullish on the 737 MAX, bearish on F-35s and deadlines, so I wasn’t expecting too much in either direction today…this week’s been rough, been bleeding a lot of the war play gains, with RSX still halted plus every play seemingly doing the opposite of what it should has my head all messed up and not in the game.
Edit- The 737 MAX news made it’s way to Baird this morning, that’s why it ran. Again, head not in the game, should have caught that.

We’ll see where it closes today, and especially what tomorrow brings, as this is either now in one of it’s uptrends towards a $200 peak or will fail to break resistance at $190 and tumble back down a bit. Not sure which direction to take today honestly.

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Looks like they will be getting a new order from Delta as well

Boeing Co (BA.N) is edging towards a landmark order from Delta Air Lines (DAL.N) for up to 100 of its 737 MAX 10 jets, a model it is battling in separate talks to get approved before year-end rule changes, people familiar with the matter said.

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Yup. Strangely DAL was a bit more bullish today than BA was. But that might have been because of the other sectors of the market getting the attention today. From a technicals perspective the next near term target should be 200 or so. If that clears and we don’t reject off 207 my expectation is 220 by earnings. I have short dated (2 week) 200 strike calls on my challenge account, coupled with the diagonal spread I suggested to Labubs on my margin account.

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Had a busy weekend, just to post something for this week and outta curiosity/for future reference I charted BA’s previous swings, up in blue, down in red. It’s not gonna be picture perfect exact, but for maximum FOMO conservation I measured the ups from the candle bodies and the downs from the wicks. The dumb little squiggles the end was just me messing around and deciding not to delete it, give feedback but don’t take that as serious prediction lol. Figured I would add 3 levels for future corresponding to similar moves up over the past year, yellow is likely, red is possible with news, light red is “BA acquires LMT” news dropping at 9:27am level lol.

Edit- Oh yeah, the tan/green horizontal lines are still there from S/R when I first looked at it. Only a few of those were touched this year, as you might notice…thinking time to delete, cause 170 is probably the new 160

There’s money to be made playing both sides with this ticker the next few weeks I think, I’m going to go check for news next. I’m thinking tomorrow is a minor red/flat decision day, with any whiff of news ready to send it. It had 3 majorly green days in a row last week (sigh) and is now deciding whether it wants to breach 200. 200c scalps/swings on an intraday dip should probably work out tomorrow, though I’m wondering about something like 190p too while it’s testing. Just a thought, haven’t checked the numbers on any options yet, and I have to play low risk for a bit after the Russian Robbery drop kicked about 35-40% outta my account that was already getting killed by damnned grains and commodities…this week will be good though, no worries ladies and gentlemen :cheers:

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https://www.washingtonpost.com/world/2022/03/21/china-plane-crash-guangxi/

Crash in China with 132 people on board, BA currently down 8% in PM, will be watching to see as this develops.

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Couple of information mentioned this morning in TF:

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My buddy was also recently poached by Boeing and is working on ICBMs.

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Thanks to you and @Genti for posting the news, yeah, this could mark the beginning of the downtrend to 160-170, though I do have 184 as a support. I got a 4/1 195c (would have liked a strike further out and closer to the money, 4/14 185 probably, but this was my BP for the day)…may be risky depending on news, but I think this crash has been priced in this morning and this pops back up this week, especially if BA does some risk management on this crash and annouce that missile contract news that now 4 different people have brought up/heard of. Or, they investigate the crash and find some fatal flaw on Boeing’s part and send this back to <160. It’s really, really up to sentiment and news right now.

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The thing to remember with this is while the missle news is bullish considering the war, this crash is more “newsworthy” and has a higher potential bearish price effect in the short term than anything that missle can probably provide news wise. The crash is current, the missle is likely years away as it sounds more like a news development. As media digs into details of the crash it is highly likely even after a press release Boeing sinks a while.

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Yeah this is true, maybe a simple straddle wouldn’t be the worst idea for anyone thinking to enter…grabbing a put up here might be a good idea, limiting profit but also giving some protection. Lemme run some numbers on optionstrat and see if that would work out, will edit this post shortly

Edit- Alright, Theta is fucking nuts again (0.2 on my 195c as one example), checking the 4/14s…all of them, calls and puts pretty much become worthless next week. This week it takes ~$2 moves up or down pay out around $100-$200 on the contracts I flipped through for 4/14.

I’m hoping to see $190 get touched again, I’m still feeling alright on this one the way $185 held after such bad news. Daily chart… doesn’t look great, buut today is a slightly bull leaning hollow indecision candle as of now (3:10pm).

Really just hoping for any positive news, today was definitely people securing profits after that plane crash news came out, but it seems the people playing this didn’t pull all out yet, which makes sense, I’d want to take my CB out and see where this decides to go if I’d been holding this over the weekend after such a bullish and profitable week (why was I not playing my own damn DD last week argh hah)

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During this turbulent time, it may be worth just letting it breathe before hopping into anything.

No pun intended