Fly with Boeing

aplus's picture

Shares of Boeing have been on a tear for the past year, going from $72 to $134, and showing no sign of slowing down.  Orders for new Dreamliners, and 777's have been strong as they refresh fleets for airlines around the world.  We like the trend that we see in Boeing (BA), and see relative strength in the shares over the market, however we'd like to see the stock pull back before entering a position, of course there's a change that may not happen in the short term if you look at the chart below.  

Instead of buying shares or calls at current levels, we are Selling the $125 Strike Puts on BA that expire in December for $0.80 cents.  There is a probability of over 70% that BA closes above $125 by December expiration, in which case we would keep the premium from this short Put.  If BA drops below $124.20, we could be forced to buy the stock, and it becomes an attractive entry point for a company that likely has years of growth ahead from global demand for new airplanes.

 

 

 

 

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