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Boeing- Position Yourself Short Term and Wait

|Includes: The Boeing Company (BA)
This Wednesday we get to take a look at Boeing (NYSE:BA) and see what their third quarter earnings looks like. Analysts are expecting earnings around $1.10 per share and like most companies this quarter; it is 1.8% below last year's earnings around the same time. Originally, estimates came in at $1.14but they have been down-sized.

Boeing has been in a bearish trend since its high of 80 back in March-April. Presently trading at 64.22, it has been battling to gain ground since August moving but 5 points up and down since then. They recently put out a rosy report for the airline industry that would have any investor seriously looking at Boeing for future growth has an investment.

They are forecasting the delivery of 7,530 new airplanes over the next 20 years at a market value of $760 billion. Most of this growth (at least in Canada and the USA) will be in 'single-isle' jetliners because of the need to replace the older aging fleet. As a financially tight industry, the airliner companies will continue looking at way to keep their planes full and cut costs while trying to raise revenue. Boeing goes on the show how they will be supporting this mindset with their "new single-aisle airplanes, such as the Next-Generation 737 and the recently launched 737 MAX, offer significant advantages in improved capabilities, fuel efficiency and maintenance costs, as well as enhanced environmental performance." The the North America fleet will grow from 6,610 airplanes today to about 9,330 airplanes by 2030. Good news for the investor?

There is a lot banking on the Dreamliner--
One of the concerns an investor might have in this economy is the number of orders Boeing my have to build planes. Recently, cancelations in the Dreamliner orders fromChina cut into productivity. A Chinese airline cancelled 24 orders and more cancelations are predicted. This could happen as Chinese Airliners assess their longer term needs in a growing regional market. Boeing's 3 year delay in production has not helped in selling the Dreamliner.

Jack Kim and Fang Yan of Reuters wrote that even though Boeing may have some cancelations of their Dreamliner, other orders are still very strong. East China may not buy some new Dreamliner, but they are filing to spend about $3.3 billion on 45 new Boeing 737's. "Australia's Qantas Airways, struggling to revive profitability on its long-haul network, said on Tuesday that it remained fully committed to its 50 Dreamliner orders. Air New Zealand also said it was not reconsidering its orders.
Korean Air Lines also said it would introduce 10 787-9 Dreamliner from 2016 'as planned'
." Boeing still has 800 orders for its lightweight carbon-composite aircraft to fill. And, the Dreamliner is now filing orders having delivered to Nippon Airlines last month.

And in the future, more companies will be looking at the Dreamliner with the ever increasing cost of fuel. The Dreamliner is 20% more fuel efficient than Boeing’s other models. There are some good things looking into Boeing's future.

We have other hesitations to consider also. Will there be a cut back in both defense and commercial contracts in the near future? With cut backs in the Dreamliner, will its 737 orders keep it afloat considering a large employee base and present downward pace? Vatalyst had these same concerns in a recent article he wrote.

Until we see Boeing cross its 50 day MA, we would be cautious on investing in any long term plans yet. Boeing appears to be a good short term bet to possibly place options spreads on, but not long term.





















Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.