There were times over the past few years that you probably wondered if Boeing (BA) would ever recover from its own miscues and the COVID-19 pandemic. Well, BA and its peer group, aerospace ($DJUSAS), were literally "flying" into the end of 2022. Check out the chart below.
If you've been wondering how the S&P 500 index ($SPX) has held up above the October low with all the weakness seen in sectors like Technology (XLK), Consumer Discretionary (XLY), and Communication Services (XLC) over the past two months, it's because the money rotating out of these three sectors isn't leaving the stock market. It's rotating!
Previously beaten-down areas like aerospace are suddenly soaring as tech money finds a new home in other stock market areas. This is critical to ending cyclical bear markets. Instead of pure distribution, we're seeing rotation. As technicians, we need to pay attention to where the money is going. Right now, investors and traders are seeing a ton of value in aerospace and in individual stocks like BA.
There's another huge potential catalyst for BA in 2023. I believe BA will reinstitute their quarterly dividend in 2023, or at least there'll be more discussion about that possibility. BA hasn't paid a dividend since the pandemic began, but prior to that was a steady dividend grower. If you throw in improving fundamentals with a return of quarterly dividends and the already-improving technical outlook, BA could be poised to carry aerospace to big gains in 2023.
Speaking of 2023, our MarketVision 2023 event, "The Road Ahead: Navigating An Uncertain Market" will be held this Saturday, January 7, 2023 and will provide you with a roadmap of what we're likely to see in the year ahead. Join me and my friends and colleagues at StockCharts.com—David Keller, CMT; Julius de Kempenaer; and Grayson Roze—as we dissect the 2022 action and provide you with our strategies and thoughts as we head into 2023. It's a FREE virtual event but does require pre-registration. CLICK HERE for more information and details about MarketVision 2023. I hope to see you there!
Happy new year and happy trading!