OptionsHouse

Options Trading News

September 18, 2013  Wed 8:11 AM CT

BA: SEE CHART GET CHAIN FIND STRATEGIES
Shame on those sellers in Boeing. What were they thinking? That Jim McNerney wouldn't figure out the Dreamliner issues? That they wouldn't come up with a program to get to the suppliers to have them cut their costs and give Boeing a better deal?

What you are seeing right now is both higher earnings coming and a higher multiple on those earnings. Boeing's going to be in the sweet spot in 2014, with costs for each plane dropping as the assembly line works 24/7 to meet the ever-longer line to get more planes.

Think about the JP Morgan upgrade yesterday of the airline business. It's all about the airlines being flush. And while some people think that a separate AMR and US Airways means more orders, I think it is the opposite. You get that deal done, and you have a carrier that must order more and newer planes.

TheStreet.com logoMeanwhile, if the price of oil doesn't come down--and given that we learned that the Saudis are pumping out everything they can to meet demand--oil isn't coming down. And that is even better for Boeing.

At every step of the way this company's been doubted, most recently when there was a fire on a plane that wasn't even caused by Dreamliner batteries, but the shorts piled in and they are still winding down their positions.

It's always dangerous to come in on top of a stock that's already up $10 in a straight line. Maybe you get a chance tomorrow if FedEx says some negative things. But this one's going higher between here and year end as it is the biggest of the big-caps doing well and that means everyone's got to show ownership in this one.

Random musings: When Bill Stiritz, one of the greatest investors of our time, bought $300 million of Herbalife shares, that was a signal that this one's going higher on a fundamental basis, not just bash-Ackman's-head-in status. Stiritz has done amazing things with all sorts of brands. He is all about making money. He will make big money on this one.

Disclosures: Cramer's charitable trust has no positions in the stocks mentioned.
Share this article with your friends


Related Stories

BA

Boeing attracts bullish earnings trade

January 20, 2016

The aerospace giant reported bullish quarterly numbers on Oct. 21 and is scheduled to announce its next results on in the pre-market hours of Jan. 27.

OptionsHouse

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

View more education articles »