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Boeing Downgrade

|Includes: The Boeing Company (BA)

After writing many articles on Boeing's achievements in 2011 and its' projections for the rest of the year, I am officially downgrading the Stock from "Buy" to "Sell."

I was right thus far, Boeing did shatter the 52-week high in April like I predicted, and in an impressive manner. The Company's stock price increased by almost 6% last week and almost all the analysts, in chorus, started upgrading the Stock and raising price targets. In the beginning of April, when I was all over Boeing, a lot of analysts were dropping price targets and downgrading the Stock. Citi dropped it's earnings estimate by almost ten cents a share a week before the announcement, Nomura downgraded Boeing to a $66.00 price target. That goes to show you that these analysts don't know what the "heck" they are doing. In fact, take all the top analyst's upgrades and buy Put Options on those stocks and you will see how much money you make. Now that Boeing beats the Street with it's earnings report and shatters it's 52-week high, Chase upgrades BA and raises the price target, in tandem with the rest of the so called "superstars" Wall Street's list of the Gods of stock predictions.

Well, they are all wrong most of the time. I know I boasted about Boeing in April. It is time to sell and take your profits. Don't get me wrong, Boeing still has potential, but now that the Street went bizerk over the earnings report and the upgrades, it is time to "take the money and run."

NATO's "screw up" this weekend with the "strategic strike" on Libya to try and assassinate Gadhafi, ended up in the death of his youngest son and three of his grandchildren. This could start a disastrous chain of events that have "brewing" in the Middle-East and the Arabic countries for a while now. This will definitely not be a benefit to the international business for Boeing, that it has been relying on developing. Additionally, there is a higher terrorist threat now, as the Islamic Fundamentalists can use this event as reason for retaliation against the US

The "Dreamliner," has had several "set-backs," that will be discussed tomorrow. The "backlog" of orders is growing beyond control, due to the assembly line outsourcing that has caused one delay after another. Also, there may be problems with manufacturing facilities and employees in the near future. And finally, AIRBUS and other international competitors are winning more and more orders and contracts, and that is taking a lot of business away from Boeing.

I am buying BA put options at $77.50 strike for May and June $75s.

Great trading to all,


Jeff the Genius