Boeing Co. (NYSE:BA) stock took a nosedive Monday after reports surfaced that the aircraft maker discovered a software glitch affecting its 737 MAX jets. The problem? It could cause an automated navigation feature to fail, potentially creating a safety risk during landing. Not exactly the kind of headline you want if you're Boeing.
The Wall Street Journal reported that Boeing has acknowledged the previously undisclosed glitch, which adds another layer of complexity to the company's ongoing efforts to maintain confidence in its flagship aircraft line.
The Software Glitch Explained
According to the report, the issue stems from a cockpit software update. It can occur when flight crews change their planned flight path after a missed approach. That's a fairly specific scenario, but in aviation, specific scenarios are exactly where problems tend to hide.
Boeing did not immediately respond to MarketDash's request for comment.
Meanwhile, broader markets traded lower Monday. Nasdaq futures fell 0.59%, while S&P 500 futures declined 0.35%. So Boeing wasn't exactly swimming against a rising tide here.
Technical Picture Looks Rough
Boeing remains below its major moving averages, and the gap isn't pretty. The stock is trading 7.8% below its 20-day simple moving average, 12.1% below its 50-day SMA and 14.9% below its 200-day SMA.
The 20-day SMA also remains below the 50-day SMA. In addition, the 50-day SMA crossed below the 200-day SMA in September. That bearish setup is commonly known as a "death cross." For the uninitiated, that's when short-term averages sink below long-term ones, signaling that momentum has shifted decisively negative.
Momentum also remains weak. The MACD is below its signal line, while the histogram is negative. That suggests buying momentum has yet to recover.
Resistance sits near $215.50, close to the 50-day exponential moving average. Support is near $187.50. A break below that level could add to selling pressure.
What Analysts Are Saying
BA carries a Buy consensus rating and an average price forecast of $272.
Jefferies maintained a Buy rating on Sept. 21 but lowered its price forecast to $265. Bank of America maintained a Buy rating and a $270 price forecast on Sept. 18. Argus Research upgraded BA to Buy on Aug. 11 with a $265 price forecast.
So analysts remain constructive, even if the stock's recent performance tells a different story.
Boeing's MarketDash Edge Rankings
Boeing has a Momentum score of 25.24 and a Value score of 26.62, according to the MarketDash Edge scorecard.
The weak Momentum score reflects the stock's recent underperformance and position below key moving averages. The Value score also remains weak relative to the broader market.
ETF Exposure Matters
Boeing is a major holding in several aerospace and defense ETFs. The Corgi Aerospace & Commercial Aviation ETF (NASDAQ:AV) has a 4.17% weighting in Boeing. The iShares U.S. Aerospace & Defense ETF (BATS:ITA) has a 9.58% weighting, while the Invesco Aerospace & Defense ETF (NYSE:PPA) has a 7.20% weighting.
Because Boeing has sizable weightings in these funds, ETF inflows and outflows can contribute to buying or selling pressure in the stock. It's a feedback loop that can amplify moves in either direction.
Where BA Stock Stands Now
Boeing shares were down 4.33% at $189.50 at the time of publication Monday, according to market data.
