BA: Time to Buy? Wild ride!
My target was hit today! WOO!
So what next? Is it time to buy BA?
As a day trade or even a swing trade long, I would say, yes actually (but not financial advice!). And there is some reasons why. Let us go to my all time fav, the linear graph:
We made contact with BA's current linear line! See? I mean, BA is the perfect example of everything I have been spewing since posting on tradingview. Stocks respond to mathematical principles and stocks undergo reversions to their mean. I just couldn't ever ask for something more perfect to prove my point.
I love BA as a company and I love that BA proves my points!
But anyway, we are right on this linear line, which means, we can expect some consolidation at least. We can see in this chart that BA, like many stocks, likes to consolidate along that linear line. If you look to the red arrow, you will see an example of this.
But even if we look at BA's technicals, its oversold on the daily. Now, that doesn't mean that it can't sell off more, but I think a nice healthy bounce is in order. BA deserves it after all of its progress.
So we see here on the daily, BA is sitting in the oversold region. We are also seeing that BA's Z-Score is trading at almost roughly -2 standard deviations away from its trading mean on the daily timeframe. Not good, I mean, not good for continuation short. This generally would suggest the need for some aggressive pullback.
Also, on the 1 hour chart, my Z score indicator is giving a buy signal:
You can see, the last time it gave a buy signal on the 1 hour chart, BA went up about 17 points.
All in all, I am longing this. And I know I am really anti-swing trade, but I likely will swing this. I also added some into my long term holdings today, too.
Will this fall more?
Yeah its possible. It could go down into the double digits really. If you follow me and my ideas, you know that a correction to the mean (Which is what BA has done) generally will overshoot more. In BA's case, maybe an additional 5% sell off from the mean would be expected. But right now, its not going to. BA has been very stubborn selling off and I trust it to at least bounce a little bit. And to be honest, even if this does return to the double digits, IMO, if you believe in the company, you would believe this would be an amazing entry price. I truly do! I don't want to risk hoping for this to go into the double digits and it not actually do it before adding back into my long term holdings.
What about the Market Drama going on now?
BA does not follow SPY. It is held on DIA. It operates independently of FANG and SPY. The dramas right now in the market are mostly SPY and FANG related. There are a bit of dramas with DIA and the industrial stocks, but for the most part, BA has not seen the kind of erratic and unfettered growth that the SPY stocks have seen.
That does not mean that BA is immune to SPY's dramas, but its not appropriate to compare it to SPY and SPY's dramas fully, IMO.I would be cautious interpreting SPY's heaviness as translating to heaviness for BA. There have been plenty of instances where SPY tanked and BA excelled and vice versa.
As always, do your own analysis and plan your own trades!
That's it!
Leave your questions/comments and criticisms below!
Thank you and trade safe!
