Boeing Strike Makes This the Right Time to Buy Shares
After our previous advice on Boeing proved lucrative, we're back with another recommendation.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
After failing to reach a contract agreement, 3,200 Boeing BA defense unit workers went on strike on Monday. The International Association of Machinists and Aerospace Workers District 837 rejected the latest Boeing offer on Sunday, leading to its first strike in 29 years.
How long will the Boeing strike last? in 2024, a strike by Boeing commercial airplane factory workers in the Pacific Northwest lasted about seven weeks. That will have little bearing on the length of the defense workers strike, which involves the manufacture of military hardware in the St. Louis area.
Boeing Rallied After Last Year’s Strike
It’s interesting to note the reaction of Boeing shares to the end of that prior strike.
Last year’s Boeing commercial strike began on September 13 (point A). The strike ended on November 4, 2024. One week later, Boeing shares rocketed higher, gaining about 30% in less than two months.
Jump ahead to 2025: Boeing hit a 52-week high last week, but began to sell off after the company reported second quarter earnings (point C). Boeing beat estimates for earnings and revenues, but the stock has lost about 7% of its value since then. Were shareholders factoring in the negative effects of a strike, which began just days later
In May, we laid out our game plan for the stock. Our final target for Boeing remains $260 (T3).
If you hold no shares of Boeing, I’d strongly consider opening a position at current levels (arrow). That’s because the stock has retreated to support (T2, dotted line), which coincides with the stock’s 50-day moving average (blue).
Bottom Line
One of my first moves this year was to buy Boeing. At the time, the stock was truly despised by Wall Street, as the company struggled to overcome a seemingly endless series of mishaps and unforced errors.
Boeing shares lost 30% of their value in 2024. Since our initial recommendation was published, Boeing has gained 29%. It was one of those rare occasions when a stock became so disliked that a contrarian play made sense.
This style of trading takes patience. Ask anyone who jumped the gun on United Healthcare UNH, in the belief that the bad news was already priced into the stock.
Like Boeing, United Healthcare will eventually have its day. Instead of trying to guess the bottom, wait for the stock to build a base, and then for some bullish price action. That formula worked with Boeing. Traders need to wait for a buy signal instead of taking a leap of faith.
At the time of publication, Ponsi was long BA.
