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Analysis of Key Stocks: Boeing, General Electric, Microsoft, and XM Satellite Radio

Strategic Insights

— 2 min read

The past week has seen a flurry of activity among key stocks, with Boeing, General Electric, Microsoft, and XM Satellite Radio grabbing investor attention. Boeing (NYSE:BA) has dropped following a brokerage downgrade, while General Electric (NYSE:GE) is selling its GE Advanced Materials unit to private-equity firm Apollo Management. Microsoft (NASDAQ:MSFT) is set to unveil its Zune media player and accompanying software, and XM Satellite Radio (NASDAQ:XMSR) has rallied over 11% after Credit Suisse lifted its rating.

Key Takeaways:

  • Boeing (NYSE:BA) has broken down from a long-term perspective, closing below its 10-month moving average for the first time since April 2003, and is showing no signs of recovery.
  • The stock continues to wrestle with resistance from its 10-week moving average, although it did edge above its 20-day trendline yesterday for the first time since late July.
  • Short sellers have sprinted for the exits, with a 24% drop in shorted BA shares last month, leaving just 0.72% of the stock's float sold short.
  • General Electric (NYSE:GE) has sold its GE Advanced Materials unit to private-equity firm Apollo Management for $3.8 billion in cash and stock, with the stock currently hovering near the 35 mark.
  • The 35 strike has provided sporadic resistance overhead, with GE managing just one weekly close above this threshold since early January.
  • The soon-to-expire September 35 call has about 111,000 open positions, and the October 35 call has 30,000 contracts already in residence, making it the site of heaviest open interest in this series.
  • Microsoft (NASDAQ:MSFT) is planning to unveil its Zune media player and accompanying software, currently attempting to fill the void left by the stock's late-April bear gap.
  • The shares have recovered more than half of this gap region and are now wedged between its two most notable call strikes in the soon-to-be-front-month October series.
  • XM Satellite Radio (NASDAQ:XMSR) has rallied over 11% after Credit Suisse lifted its rating to "outperform" from "neutral", with the stock nosing above its 20-week moving average, which has not been breached to the upside since early October of last year.

Statistics:

  • Boeing (NYSE:BA) has a 24% drop in shorted shares last month, leaving 0.72% of the stock's float sold short.
  • General Electric (NYSE:GE) is selling its GE Advanced Materials unit for $3.8 billion in cash and stock.
  • Microsoft (NASDAQ:MSFT) has recovered more than half of its late-April bear gap, with the shares currently attempting to fill the void.
  • XM Satellite Radio (NASDAQ:XMSR) has a 12% short float, providing a decent foundation of short-covering support.

Sources:

  • Schaeffer's Investment Research, http://www.SchaeffersResearch.com
  • Bernie Schaeffer's Option Advisor
  • UBS, brokerage downgrade of Boeing (NYSE:BA)
  • Credit Suisse, rating upgrade of XM Satellite Radio (NASDAQ:XMSR)
  • Apollo Management, purchase of GE Advanced Materials unit from General Electric (NYSE:GE)

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