Boeing stock, just like the company’s planes, was flying high in November 2015, when prices soared above $150. But a lot of things happened during the last three months. On February 11th, 2016, Boeing stock plunged to $102. The company’s perspective seems to be far from positive now, especially if we consider all the problems the company has to deal with, which cause investors to get rid of their Boeing shares right away. Here are some excerpts from other media, illustrating how bad things are right now.
“Boeing shares are plummeting by 10.04% to $104.68 on Thursday afternoon, the lowest intraday price in over two years, following reports that the Securities and Exchange Commission is probing the aerospace giant’s accounting practices.” –The Street
“JPMorgan downgrades Boeing following SEC investigation” –Bidness Etc
“Boeing’s stock plunge is of historic proportions” –MarketWatch
Analysts are desperately trying to find the reasons behind Boeing’s sell-off. Starting from the company’s earnings report, moving to the SEC investigation and ending up with JPMorgan’s downgrade, there are plenty of factors, which could explain the slump. However, these post-factum explanations are useless to investors, who need to be prepared before it is too late and before their money is already gone. A method, which could predict what is going to happen and give them a warning before the crash, is far more useful. A method such as the Elliott Wave Principle, which we used back in April, 2015, in an article called “Boeing Approaching Severe Turbulence”. By the time of writing, Boeing stock was trading above $154, which did not stop us from expressing our opinion that “levels around $120 are highly probable”. The chart below was the only reason for our bearishness.
As visible, there was a nice five-wave impulse to the north. According to the Wave Principle, a three-wave correction to the south was supposed to develop. Soon after that, Boeing stock reversed to the downside. On August 24th, the price fell as low as $115.50, thus reaching and exceeding our target of $120. But the worst was yet to come, so we published an update, titled “Boeing Fell As Expected On “Black Monday”, where you could find the following chart.
As you can see, our wave analysis suggested we should expect a recovery in wave B, followed by another crash in wave C. The conclusion was that “wave B could be very deceptive, so investors should not trust it. If they do, wave C could be devastating”. Unfortunately, the Elliott Wave principle is far from being the most popular method of analysis in the world. That is why Boeing’s crash came out of the blue to the majority of market participants. The chart below shows the weekly chart of the stock as it is today.
The chart speaks for itself. It turns out the principle Ralph Nelson Elliott discovered in the 1930s, is still valid today, in 2016. Furthermore, it could help you predict not just one, but several consecutive moves in the stock market, without the need to wait for lagging fundamental factors like earnings reports, SEC investigations or rating downgrades. All you need is a chart to show you the natural law of the market. So, leave the search for reasons to the media. What traders and investors really need is a forecasting method. The Elliott Wave principle has earned our trust and we believe it deserves yours too.
What to expect from now on in Boeing stock? Well, there is a classic 5-3 wave pattern on the weekly chart now. According to the theory, the larger trend should resume in the direction of the five-wave sequence. In other words, Boeing is supposed to start rallying again, despite all the negative factors people blame for its crash right now. We think that just like nobody saw the sell-off coming, when the stock was above $154, nobody is going to appreciate the upside potential now, when it is struggling to hold above $100. Except for Elliott Wave analysts, of course.
