Boeing stock price may have a China and Iran catalyst soon

Boeing stock price has rebounded in the past few weeks, moving from a low of $187 to $210.

This trend may continue as the company faces some major catalysts, including potential orders from Iran and China. 

Potential orders from Iran and China 

Boeing stock may become a major beneficiary of the potential deal between the US and Iran.

One major catalyst for the stock is that there is a high likelihood that Iran will seek primary and secondary tariff relief from the US, a move that will unlock billions of dollars in funds.

To sweeten the potential deal with the US, Iran may offer to make huge purchases of Boeing planes as it did after the signing of the JCPOA deal under Obama.

At the time, Iran Air made an order of 80 aeroplanes worth over $16 billion, while Iran Aseman placed an order worth nearly $20 billion.

These orders were not fulfilled after President Donald Trump exited the Iran Nuclear Deal and reimposed sanctions.

As such, if he engineers a deal, there is a possibility that Iran will make a big order that will benefit Boeing and General Electric, which makes most of its engines.

The other main catalyst for the Boeing stock price is that the ceasefire opens the door for Trump to travel to China in May this year.

As we have written before, Chinese airlines, which have not made Boeing orders in years, are planning to purchase as many as 500 planes worth billions of dollars. 

Chinese and Iranian orders will likely help to narrow the backlog order between Boeing and Airbus.

In the most recent results, Boeing said that it had a backlog of 6,735, while Airbus had 8,770 planes.

At the same time, a complete ceasefire will likely help Boeing with its margins as the prices of key commodities like aluminium and steel drop.

Boeing’s business has made major improvements 

The other key catalyst for the Boeing stock price is that its business has made major improvements in the past two years.

The most important one is that its planes have become safer, a move that will push more airlines to place orders.

It is also increasing its deliveries. For example, it delivered 600 commercial planes last year, the highest level since 2018, and the management has started to increase production.

The company’s defence business will also benefit from the Iran war and the need to replenish the used equipment, especially now that Trump has requested a $1.5 trillion defence spending. 

The company received orders worth over $15 billion in Q4, bringing the total defence backlog to $85 billion.

This makes it one of the top companies in the Military Industrial Complex that includes other names like Northrop Grumman, RTX, and Lockheed Martin.

Boeing stock price technical analysis 

BA stock chart | Source: TradingView

The daily timeframe chart is sending mixed signals on the BA stock price.

On the negative side, it has formed a mini death cross pattern as the 50-day and 100-day Exponential Moving Averages (EMA) have crossed each other.

This cross often leads to a strong bearish breakdown.

On the positive side, the stock has formed a slanted double-bottom pattern whose neckline is at $254, its highest point in January this year.

Therefore, while the stock may break out in either direction, its major catalysts means that it may soar substantially in the coming days or weeks. If this happens, it may soar to $250.