Key Takeaways
- Boeing shares remain on the radar Monday after a report said that the airplane maker has rolled back its 737 output goals.
- The company has come under heavy scrutiny from aviation regulators and lawmakers this year following several safety incidents and production mishaps.
- The incidents have resulted in the company significantly reducing its output while it develops a plan to improve manufacturing and quality control processes.
- Boeing shares may encounter overhead resistance around $197 from a key horizontal line that sits just below the 200-day moving average, while finding support near this year’s low at $159.70.
Airplane maker Boeing (BA) remains on the radar Monday after Reuters reported Friday that the company told suppliers it plans to slow the output goal of its troubled narrow-body 737 jet for three months.
People familiar with the matter said an updated Boeing supplier schedule circulated within the industry showed the company has targeted 737 output to reach 42 in September, whereas, it had previously intended to reach that goal by June.
One of world’s largest plane makers, Boeing, has come under intense scrutiny from aviation regulators and lawmakers this year following several safety incidents and production mishaps, resulting in the company significantly reducing its output while it develops a plan to improve manufacturing and quality control processes.
In January, the Federal Aviation Administration (FAA) grounded Boeing’s expansion plans for its best-selling 737 MAX after the jet type flown by Alaska Airlines (ALK) was involved in a near-fatal accident that month following a door plug detaching mid flight. Last week, Boeing said it delivered 24 planes in May, down from 50 in May 2023, highlighting the fallout from its scaled back production.
Looking further ahead, Boeing’s supplier schedule projects output to reach 47 jets a month by March next year, much slower from its earlier target of achieving that goal by January. Moreover, it now sees output hitting 52 in September 2025, a target it had previously expected to reach in June next year.
Monitor These Two Key Chart Levels in Boeing Stock
After topping out in late December last year, Boeing shares have traded within a descending channel, with the price touching the pattern’s upper and lower trendlines several times since then. It’s also worth pointing out that the 50-day moving average (MA) crossed below the 200-day MA in early March to form an ominous death cross, a chart pattern that often signals lower prices.
More recently, the shares found selling pressure near the channel’s top trendline but appear to be holding support near the 50-day MA. If the stock moves higher from these levels, investors should monitor the $197 level, an area where the price may encounter overhead resistance from a horizontal line that sits just below the downward sloping 200-day MA. If selling continues, watch if buyers can defend the 2024 low at $159.70.
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