History Says This Dow Stock May Soar to Record Heights

Call buyers have favored Boeing stock for weeks

Managing Editor
Mar 7, 2019 at 2:16 PM
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Aerospace giant Boeing Co (NYSE:BA) has been making big moves on the charts of late, with a bull gap in late January paving the way to the shares' March 1 record high of $446.01. While the stock has since pulled back to a key trendline, data from Schaeffer's Senior Quantitative Analyst Rocky White indicates the next leg of BA's rally could be on the horizon.

At last check, Boeing stock was 0.6% lower at $421.78. Digging deeper, BA is now trading within one standard deviation of its 20-day moving average, after a lengthy stretch above this trendline. The stock has made similar pullbacks at least nine timesin the past two years, gaining 6.8%, on average, one month out, per data from White. What's more, BA was higher a month later 78% of the time. Another surge of this magnitude would put Boeing stock near $450.46 -- at a fresh record high.

BA Chart 20

Boeing stock has been a favorite of call buyers over the past 10 weeks. This is per BA's 50-day call/put volume ratio of 1.65 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 92nd annual percentile. In other words, calls have been purchased at a faster-than-usual clip -- not too surprising, considering BA's ascent in 2019.

Lastly, now may be a prime time to speculate on Boeing stock's short-term trajectory with options. The aerospace name's Schaeffer's Volatility Index (SVI) of 24% ranks in the 20th annual percentile, meaning short-term options are relatively cheap at the moment, from a historical volatility perspective.

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