Hi Traders,
Boeing (BA) is in an uptrend and it has one more leg higher to trade to the top of my pitchfork:
That takes BA up to $244.65, another ten bucks higher. Use a close below $233 as your stop loss.
The pitchfork is telling us BA wants the upper median line. The fundamentals are right behind the chart. Boeing just reported Q1 revenue of $22.2 billion with 143 commercial deliveries.
Wolfe Research raised its price target to $275 the day after the print. Morgan Stanley bumped to $250. This is a textbook setup.
BA is sitting on a record backlog above $545 billion. The 737 MAX production ramp is finally on track. The stock is still trading 15 percent below its 52-week high, so there is room to run.
Boeing is the world's biggest aerospace manufacturer. They build commercial jets, defense systems, and space hardware. That is the kind of physical, hard-to-replace business that keeps printing revenue regardless of what the AI trade is doing.
The One to Leave: Nike Falls to the Bottom of the Pitchfork
Nike (NKE) is going to trade down to $42.13:
Next week's 44.50 puts are under 90 cents. Those will double.
Use a close above $45.60 as your stop loss or 50 percent on your options.
The chart is broken and the news flow is making it worse. NKE gapped down 15 percent on its last earnings report. Management guided Q4 revenue to decline two to four percent and projected Greater China revenue to fall 20 percent.
JPMorgan cut its target from $86 to $52. Goldman Sachs went from Buy to Neutral. The pitchfork median line is broken and MACDs are rolling bearish.
Now the company is cutting 1,400 jobs. The chief innovation officer just quit after less than a year. HSBC downgraded the stock to Hold last week.
Nike is the world's biggest athletic footwear and apparel brand, but the brand premium is not carrying the stock anymore. Margins are still falling and China is still bleeding. The turnaround story keeps getting pushed out another quarter, and we just need to catch two, three dollars on the way down.
Trade Accordingly,
Licia Leslie
One stock is climbing into a record backlog with the chart pointing up. The other is bleeding from every direction with the chart pointing down.
Licia's read is simple: when the pitchfork lines up with the fundamentals, you don't need to be a hero, you just need to catch the move.
The real question: what will the team pick on Monday?
Join the Ticker Highlight Show Premium before Monday at 10:30 AM ET to find out.
See you there,
Charles Delvalle
Editorial Director, Option Pit