Buying Boeing (BA) Stock on the Dip: A Step-by-Step Trading Plan Using the Levitan Method
For investors looking to capitalize on long-term opportunities, buy-the-dip strategies provide a compelling approach. This article presents a structured plan to purchase Boeing (BA) stock using… Levitan methodA buy-low strategy that aims to accumulate stocks at increasingly attractive prices as the stock declines, while maintaining a favorable risk-reward ratio.
Regression of the purchase plan for BA shares, using the Levitan method
Purchase orders step by step
This plan depends on Average cost in dollarsAnd buy at key levels related to previous volume profiles. At your own risk, you can buy more shares as the price falls, thus lowering your overall cost basis. Naturally, there are also fixed stops to ensure there is known and limited downside risk. Below are the suggested purchase orders:
- First purchase order:
- price: $141.55
- Number of shares: 100
- It costs: $14,155
- Percentage of total position: 16.67%
- Second purchase order:
- price: $131.55
- Number of shares: 200
- It costs: $26,310
- Percentage of total position: 33.33%
- Third purchase order:
- price: $117.55
- Number of shares: 300
- It costs: $35,265
- Percentage of total position: 50%
Once all three orders are executed, the investor will have made a deposit 600 shares In a Weighted average entry price is $126.22. The total cost for this job will be $75,730.
Risk and reward metrics
One of the essential aspects of any trading is risk management. In this plan, Stop loss It is set on $113.60Which means that if the stock price drops to this level, the position will be sold, resulting in a loss $12.62 per share. For a full position of 600 shares, this would amount to a total loss of $7,573.
On the upper side, Earn target profit It is set on $194.37providing a potential gain of $68.16 per share. If the stock price reaches this level, the total profit for the 600 share position will be: $48,467.
together Reward to risk ratio to 5.40This trading plan offers an attractive balance, making the potential reward five times higher than the risk.
Boeing (BA) Current Market Context
As of October 14, 2024Boeing’s pre-sale price is $148.39which is approximately 66% below all-time high (ATH). The first buy order in this trade plan is set at $141.55which represents the price 67.5% below ATH. This strategy aims to take advantage of potential declines, allowing the investor to accumulate stocks at prices more favorable to market fluctuations.
Flexibility in implementation
One of the strengths of this trade plan is its flexibility. While the plan specifies purchase 600 sharesIt can be easily modified to suit smaller portfolios or different risk appetites. For example, instead of buying 100, 200, or 300 shares, an investor can choose to go long 10, 20 and 30 sharesWhile maintaining the same prices and ratios. This would lead to the same thing Weighted average entry price is $126.22but for a smaller total investment.
Final considerations
This buy-the-dip strategy provides a systematic approach to accumulating shares of Boeing stock while managing risk. However, it is important to remember that All investments carry risksThis trading plan is based on opinion and not financial advice. As always, investors should conduct their own research and consult additional sources before executing any trades.
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