Time to fly?
Wall Street rebounded on Wednesday's first hour's tradings after two days of free fall, mostly got supported by tech stocks and Boeing. While Nasdaq and Dow Jones Industrial Average were up nearly 200 points, later in the last hours NASDAQ lost all its gains to trade, but Dow Jones was still up almost 0.5%. SP500 also gaining about 0.3%.
Besides rebound in most tech stocks, Boeing also soared more than 3.5%% with good news and updates to lead the Dow. Generally, the aerospace sector was increasing amazing today after reports and upgrades traffic forecasts. Last week in the Durable Goods Orders also we could see 53 new orders for Boeing in August, and it can be another signal that global travel is trying to find its position back.
The global economy continues to recover from the Covid-19 pandemic. Same in the US, the nationwide lockdowns that started over a year ago, in most states had relaxed as vaccinations continued to roll out and new infected decreased in months. However, we have reports that cases are rapidly rising again in some places, and mask mandates are returning in some states as the delta variant spreads, but it does not hurt the market as before, since already people and businesses learned how to deal with that, so going back to lockdowns, is not the option right now. On the other hand, in many developed economies already group and social activities are normalizing, like going to the cinemas and football stadiums.
So higher demand for travel and aerospace serviced will translate into more deliveries down the road. This is the market expectation generally for the aviation industry, and Boeing, as one of the main market leaders sure will take advantage of that.
From the technical point of view, as we can see in the below figure, the price is back above 50 Day moving average (221) and could touch the 200 DMA (230) in its first 30 minutes of Wednesday trades. OBV downtrend line has been breached a few days ago to turned upward and trend change is supporting with RSI at 58.
