Low.

Where is 737max?

A cloud that has long shrouded the company’s head is the fate of the 737MAX. After two fatal air crashes, the aircraft was grounded in early 2019, which caused a significant drag on the company and the stock price. Recently announced that it will conduct a test flight, and conducted its first test flight on June 29. As soon as the news came out, the stock soared by more than 10%. The purpose of these flights is to allow the FAA to improve the landing of the 737 MAX. There were two more flights last week, the last one was on Thursday, July 2.

Now that the flight has been completed, the next task is to return the plane to the sky. There are many obstacles to overcome, the biggest obstacle is the pilot training and restore confidence in the aircraft itself. Boeing hopes to cancel the grounding in September, and at the end of this year the 737MAX will once again fly into the sky. At least 800 Boeing 737 aircraft were grounded. A large part of it has never been delivered to customers. On May 27, Boeing announced that it would resume production of this aircraft. This shows its confidence in the aircraft itself.

What is the recovery like?

We hope that most people who read this article will agree that Boeing will not leave anywhere soon. Even if the company finds itself in serious trouble, the government will continue to bail it out. Boeing will continue to stay here. In our opinion, it is foolish to bet on stocks rising to $0. Undoubtedly, as shown below, revenue growth will decline severely, but the expected rebound will be equally severe.

Unless the vaccine makes everyone feel safe again, it will take several years for air traffic to return to its previous level, but we doubt it. We believe that the market is far-sighted on this issue, and discounts are one of the reasons. For Boeing, the key is to be able to create surprises on both fronts. This is the driving force behind the stock’s continued return to above $300. We still have a long way to go.

What is the price?

Looking at the technical side, we can see that a triangle is formed here. I believe we will see the same takeoff as the first time, but there is no reason to start from here, and it cannot be pushed to the 200-day moving average, which is now 26%. This is the resistance at the next point. The same theory applies to the previous triangle. It won’t be long before we see a clean breakthrough. Both situations can happen, especially