For investors looking to take advantage of long-term opportunities, dip-buying strategies can be a valuable approach. This article outlines a step-by-step plan to purchase Boeing (BA) stock using The Levitan Method, a strategy that aims to accumulate shares at lower prices as the stock declines, while maintaining a favorable risk-to-reward ratio.
The plan is based on dollar-cost averaging and involves buying at key levels based on previous volume profiles. As the stock price decreases, more shares are purchased to lower the overall cost basis. There is also a hard stop in place to limit downside risk.
The proposed buy orders for Boeing stock using the Levitan Method are as follows:
– First Buy Order: Price $141.55, Number of Shares 100, Cost $14,155, Percentage of Total Position 16.67%
– Second Buy Order: Price $131.55, Number of Shares 200, Cost $26,310, Percentage of Total Position 33.33%
– Third Buy Order: Price $117.55, Number of Shares 300, Cost $35,265, Percentage of Total Position 50%
Once all three buy orders are filled, the investor would have accumulated 600 shares at a weighted average entry price of $126.22, with a total cost of $75,730.
Managing risk is crucial in any trade. The stop loss for this plan is set at $113.60, while the take profit target is $194.37. This offers a potential gain of $68.16 per share, with a total profit of $48,467 for the 600-share position. The reward-to-risk ratio for this trade plan is 5.40, indicating a favorable balance between potential reward and risk.
Boeing’s premarket price as of October 14, 2024, is $148.39, approximately 66% below its all-time high. The first buy order in this plan is set at $141.55, 67.5% below the all-time high, allowing investors to capitalize on potential dips in the market.
One of the strengths of this trade plan is its flexibility. It can be adjusted to suit different portfolio sizes and risk appetites while maintaining the same weighted average entry price. This dip-buying strategy offers a systematic approach to accumulating Boeing stock while managing risk, but it’s essential for investors to conduct their own research and consider additional sources before making any trades.
