The Boeing stock price is set to erase some of its Friday’s gains after the company grounded its 777 model airline globally. The new crisis will likely push the BA stock price lower after it jumped by more than 4% on Friday.
The background: Boeing stock price has been recovering after countries started administering a coronavirus vaccine. Notably, some of the biggest regulators have already okayed the Boeing 737-Max aircraft. Investors believed that the company will recover as the world economy emerges from the pandemic. In fact, it has already risen by more than 145% from its lowest level last year.
What happened: Boeing stock price will likely pare back some of its gains after the company announced a global grounding of 128 777 jetliners powered by a Pratt & Whitney engine. This happened a day after a jet owned by United Airlines suffered a major damage over Colorado. The firm said:
“While the N.T.S.B. investigation is ongoing, we recommended suspending operations of the 69 in-service and 59 in-storage 777s powered by Pratt & Whitney 4000-112 engines until the F.A.A.”
Analysts now believe that the company will be in the spotlight again for the wrong reasons.
Boeing stock price analysis
The four-hour chart shows that the Boeing share price has been in a slow uptrend starting from January 27. The stock has jumped by more than 14% in this period. It has also moved from the 50% Fibonacci retracement level to the 23.6% retracement level. The shares have also formed an ascending channel.
Therefore, in my view, the stock will open lower at around $200 and then pullback as investors digest the latest news.
BA stock price chart