PreMarket Prep Stock Of The Day: Boeing

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

For a variety of different reasons, the reopening trade has begun to fade. However, there is one specific reason Boeing Co. BA is deep in the red in Monday’s session.

Peaked In Match: While the S&P 500 index making new all-time highs several times since the March 2020 low, that isn't the case for Boeing. In fact, one has to wonder if the issue will ever revisit its all-time high made in April 2019 at $466.01.

It took some time, but Boeing was able to have a major rebound off its March 2020 low ($88), the lowest level since April 2013 when it bottomed at $83.80. Unfortunately for shareholders, the rebound off of that low was capped on March 15, 2021, at $278.57.

Rebound Off May: Two months after topping out, Boeing put in place a double bottom at the $220 area in mid-May and staged a solid rebound. Beginning with its May 19 low ($220.28), it was higher in the next seven of eight sessions, peaking at $258.40 on June 2. That high matched its April 14 high ($258.37) and was just under a pair of highs from April 5 ($260.38) and April 6 ($259.35).

Trading Range: Since June 11, Boeing has been in a trading range from $235.80-$252.39. It didn't spend much time trading at the top or bottom of the range, but mostly sliced up and down through the $240 handle.

On Thursday and Friday, it tested the top of the trading range, with daily highs at $250.74, and expanded the current trading range to $252.30 on Friday.

No Room For Error: With the reopening trade going into reverse and the weak price in Boeing, it didn't take much to send investors to the exits. On Sunday, the company announced Boeing 777X will not win certification approval before mid-2023 with the FAA.

With maintenance and production methods at the company under scrutiny for the past few years, this type of news didn't settle well with investors.

Sell First, Ask Questions Later: Boeing exhibited modes weakness in premarket trading perhaps being buoyed by the favorable price action in the S&P 500 index futures. However, the reaction in both of them off the open was the same.

The index peaked minutes into the session and so did Boeing. After a lower open, it was unable to come close to the bottom of Friday’s range ($248.25). In fact, it only bounced 35 cents off its $3 lower open to $245.08 and continued its move lower.

As of 2:15 p.m. ET it has surpassed all of its daily lows last week, except for one last Monday’s low ($237.10) ad $238.88 stands as the low for the session. So far, any attempts to rebound have greeted with willing sellers.

PreMarket Prep Take: The author of this article noted the weakness in the issue and questioned whether or not the company could shrug off the news as it has in the past. The pair of lows at the $243.50 was identified as a “must hold” level.

Investors didn't ignore the news and Boeing sliced through the aforementioned early support in the session. The next lows based on the daily charts are from June 21 ($237.25) and June 20 ($235.80).

The full discussion on the issue along with some insightful commentary on American Airlines Group Inc. AAL from Monday’s show can be found in the video below.

Photo: Steve Lynes via Wikimedia.