Boeing, IBD Stock Of The Day, In Buy Range As Airlines Eye Big Fleet Moves – Investor's Business Daily

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Boeing

Boeing

BA

$4.35 1.78% 116%

IBD Stock Analysis

  • Boeing stock is back above a 244.18 buy point.
  • Shares undercut the entry last week but held 21-day support.
  • The stock is also breaking a short-term downtrend.

Composite Rating

Industry Group Ranking

Emerging Pattern

Cup

* Not real-time data. All data shown was captured at 11:28AM EDT on 03/29/2021.

Boeing (BA) is the IBD Stock of the Day as the aerospace giant retakes a buy point amid a rebounding aviation sector. Southwest (LUV) on Monday confirmed a big expansion of its 737 Max orders, while American Airlines (AAL) predicted most of its overall fleet will be reactivated in Q2. Boeing stock rose.

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The moves come as travel recovers from lows last year, when the coronavirus pandemic began shutting down parts of the economy. However, cases are on the rise again, as states ease restrictions.

Southwest said it would add 100 orders for the Boeing 737 Max 7. The first 30 of those are scheduled to be delivered next year. The Max 7 has fewer seats than the Max 8 but a slightly longer range.

The carrier also converted 70 Max 8 firm orders to Max 7 orders. And it added 155 options for the Max 7 or Max 8 for 2022 through 2029.

The changes, in total, will give Southwest 349 Max orders and 270 options for Max 7 or Max 8 aircraft for 2021 through 2031.

The carrier will also speed the retirements of its 737-700 aircrafts. The deal between the airline and the jet maker comes as the 737 Max begins to return to the skies, after the U.S. and other nations grounded the plane in 2019 following two fatal crashes.

Earlier in the month, Reuters reported that Southwest was close to a deal with Boeing for a big order of the 737 Max jets. Boeing, in February, saw more orders than cancellations, after the grounding of the Max and the coronavirus pandemic upended demand.

Southwest this month began flying its existing Max jets again. The jet could return to the carrier’s full network next month.


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Boeing Stock

Shares rose 2.4% to 250.74 on the stock market today. Boeing stock is back within buy range of a cup base with a 244.18 buy point, according to MarketSmith chart analysis.

Boeing stock pulled back below the entry last week, but held support around its 21-day line and closed above 244.18 on Friday. While the so-called round trip was a fairly strong sell signal, it didn’t invalidate the buy point.

Monday’s Boeing rally is also breaking a short-term down trend, representing another buy signal.

Southwest stock rose 0.8%, while American Airlines was down 1%. Among other airline stocks, Delta Air Lines (DAL) lost 0.9%. United Airlines (UAL) fell 1.4%.

American also said Monday it sees its current rebound in bookings to continue into Q2. And the airline said it expects to reactivate most of its jets in Q2 to meet demand. Airlines began idling jets as travel demand shrank during the pandemic.

The carrier, in a filing, said it has seen “recent strength” in bookings for domestic and shorter international flights in Q1, after coronavirus vaccinations expanded.

That marked an improvement from the beginning of that quarter. At that time, American said it experienced “softness” in bookings, after the CDC began requiring a negative Covid-19 test results to enter the U.S. this year.

As of March 26, American’s seven-day moving average of net bookings was roughly 90% of the level it saw in 2019.

American also said it expects total flight capacity for Q1 to be down around 40% to 45% compared to Q1 of 2019. Earlier, the company said it expected that figure to be down 45%.

American is also 737 Max customer and resumed flights with the plane in late December.

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