Boeing Co (NYSE:BA) delivered earnings on Wednesday that topped estimates, but the shares pulled back nonetheless, leaving many investors disappointed the blue-chip aerospace stock did not ascend to record highs. Below, we will examine the fallout of Boeing's earnings report, and how options traders are positioning themselves.
Following Wednesday's earnings report, Boeing shares pulled back, but the drop was contained by their 40-day moving average -- a historically bullish trendline. According to Schaeffer's Senior Quantitative Analyst Rocky White, the stock is now trading within one standard deviation of its 40-day moving average after a lengthy stint above this trendline. Following the last eight pullbacks to this moving average, BA was up 2.51%, on average one month later, and was higher 63% of the time.
At last check, Boeing stock is down 0.9% to trade at $256.99. Still, the stock received a price-target hike to $290 at Argus today. BA stock has tacked on almost 80% year-over-year, and touched a record high of $267.21 on Tuesday prior to earnings.
Analysts, meanwhile, are mixed on the aerospace stock. Of the 17 brokerages covering BA, nine rate the stock a "strong buy," while the other eight rate it a tepid "hold." Should BA bounce off its 40-day moving average again, it could prompt analysts to re-evaluate their pessimistic outlooks.
Near-term Boeing options traders are put-heavy, as evidenced by the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.97 -- which ranks in the 78th percentile of its annual range. Should Boeing resume its upward trajectory, an unwinding of these likely bearish bets could support additional upside in the equity.
The good news for options traders is that Boeing has made bigger-than-expected moves on the charts over the past year, compared to what was expected from options traders. This is according to BA's Schaeffer's Volatility Scorecard (SVS) of 93.