On Sunday, an Ethiopian Airlines crashed killing 149 passengers and eight crew members on board shortly after takeoff. When the US markets opened Monday morning, Boeing stock gapped down 11% and fell as much as 13.5% to $365.55 shortly after market open.
Ethiopia, China and Indonesia, Caribbean carrier Cayman Airways, Comair in South Africa and Royal Air Maroc in Morocco temporarily grounded their Boeing MAX 8s as a precautionary measure.
The incident was the second deadly crash of the new Boeing planes in less than five months. A Lion Air Boeing 737 MAX 8 plunged into the Java Sea shortly after taking off from Jakarta in October, killing all 189 people on board.
The FAA said they continuously assesses and oversees the safety performance of U.S. commercial aircraft and if they identify an issue that affects safety, the FAA will take immediate and appropriate action…implying the Boeing MAX 8s were safety until proven otherwise.
NOTE: there are over 4000 Boeing MAX 8s on order by airlines all across the world.
The stock closed the day only down 5%. I knew the drop in price was just going to be temporary. It was retail investors that sold their Boeing stock. And you know what the Smart Money did, they saw an opportunity to buy Boeing at a discount.
After consolidating for most of 2018, price broke out in January on the monthly chart.
After price touched the daily demand at $360, the chart suggest price will rise to the daily supply at $430.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.