Bulls Take Advantage of Underperforming Boeing Stock

Orders, deliveries, and a new partnership are boosting BA

Deputy Editor
Oct 3, 2023 at 12:34 PM
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As 25 of 30 blue chips take a breather, options traders are taking advantage of aerospace giant Boeing Co (NYSE:BA), which is one of the best performing Dow stocks today.

At last glance, BA was 0.9% higher at $189.46, following a slew of positive updates for the aircraft manufacturer. United Airlines (UAL) reportedly ordered 50 of Boeing's 787 Dreamliners, while Allegiant Travel (ALGT) secured financing for four 737 MAX jets.

Also giving BA a lift, RTX (RTX) selected Boeing as a collaborator on the X-66A flight demonstrator -- a wing of the National Aeronautics and Space Administration's (NASA) Sustainable Flight Demonstrator project. Silk Way West Airlines received its first Boeing 777 Freighter as well, while Air Tanzania took its first delivery of the 737 MAX.

Bulls are betting on Boeing stock taking flight. At last glance, around 85,000 calls have crossed the tape, which is double the volume typically seen at this point. Positions are opening at the seven most popular contracts, with the October 200-strike call boasting a commanding leaf. 

This interest in bullish bets isn't new, however, as data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows. In fact, BA's 10-day call/put volume ratio of 2.53 sits in the 84th annual percentile. Echoing this, its Schaeffer's put/call open interest ratio (SOIR) ranks lower than 99% of annual readings, meaning near-term call open interest outnumbers put open interest.

Boeing stock is also brushing off a bear note, as Wells Fargo cut its price target to $230 from $270, though it maintained an "overweight" rating. BA's 12-month consensus target price of $248.40 is a 31.1% premium to its current perch.

The equity has struggled over the past month, losing 15.3% with downward guidance from its 10-day moving average. Shares are now fractionally lower this year, and just crossed below long-term support at the 320-day trendline. This could present a good entry point, however, considering Boeing stock is saddled with a 50.4% year-over-year lead.

 
 

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