About 20 minutes out from the close, and Boeing (BA) is against battling $200 on negative headlines. 

The Recap

To recap, I view it as a coin-toss going into tomorrow’s quarter. The money-metric is cash flow guidance: Guidance beats, stock goes up; guidance misses, stock goes down. 

On one hand, the FAA’s production cap, today’s MAX 7 headlines, and a history of managerial missteps raise valid concerns. On the other, China unexpectedly reopening for the MAX 8, the swift re-incorporation of MAX 9 globally, and the positive MAX 10 news provide reasons for optimism. 

Trade Update

I understand wanting to stay in the trade so close to our catalyst, which is earnings (set for tomorrow – 1/31/24 – before the open). However, this is a reminder that the $200 exit target remains. If BA closes below $200, it’s a signal from the market that the odds for a positive earnings outcome is not favorable. A negative earnings outcome could add 10-15% additional downside to the >20% downside BA is in now. 

I chose $200 due to its strategic importance: it is in the inflection point of market confidence. You get out there to avoid getting out at a lower price triggered by a loss of confidence.