There have been instances over the previous few years that I puzzled if Boeing (BA) would ever recuperate from its personal miscues and the COVID-19 pandemic. Nicely, BA and its peer group, aerospace ($DJUSAS), had been actually “flying” into the tip of 2022. Take a look at this chart:
If you happen to’ve been questioning how the S&P 500 has held up above the October low with all of the weak spot seen in areas like know-how (XLK), shopper discretionary (XLY), and communication companies (XLC) over the previous two months, it is as a result of the cash rotating out of those three sectors is not leaving the inventory market. It is rotating!
Beforehand beaten-down areas like aerospace are instantly hovering as tech cash finds a brand new house in different inventory market areas. That is essential to ending cyclical bear markets. As a substitute of pure distribution, we’re seeing rotation. As technicians, we have to take note of the place the cash goes. Proper now, buyers and merchants are seeing a TON of worth in aerospace and in particular person shares like BA.
There’s one other HUGE potential catalyst for BA in 2023. I consider BA will reinstitute their quarterly dividend in 2023, or not less than there will be extra dialogue about that risk. BA hasn’t paid a dividend because the pandemic started, however previous to that was a gentle dividend grower. If you happen to throw in enhancing fundamentals with a return of its quarterly dividend, together with the already-improving technical outlook, BA may very well be poised to hold aerospace to BIG positive aspects in 2023.
Talking of 2023, our MarketVision 2023 occasion, “The Street Forward: Navigating An Unsure Market” can be held this Saturday, January seventh, and can present you a roadmap of what we’re more likely to see within the 12 months forward. Be part of me and my associates and colleagues at StockCharts.com – David Keller, Julius de Kempenaer, and Grayson Roze – as we dissect the 2022 motion and supply you our methods and ideas as we head into 2023. It’s a FREE digital occasion, however does require pre-registration. CLICK HERE for extra info and particulars about MarketVision 2023. I hope to see you there!
Comfortable new 12 months and pleased buying and selling!
Tom Bowley is the Chief Market Strategist of EarningsBeats.com, an organization offering a analysis and academic platform for each funding professionals and particular person buyers. Tom writes a complete Day by day Market Report (DMR), offering steerage to EB.com members each day that the inventory market is open. Tom has contributed technical experience right here at StockCharts.com since 2006 and has a elementary background in public accounting as nicely, mixing a singular talent set to method the U.S. inventory market.