Controversial Boeing Attempts To Dominate The Friendly Skies, Highlighting Potential In Direxion's BOEU And BOED ETFs

Easily one of the most controversial publicly traded enterprises in recent memory is aerospace juggernaut Boeing Co. BA. Though an icon of industry, a series of misfires and tragedies have weighed heavily on its credibility. At the same time, management is looking to turn a new page, and there’s strong evidence of a turnaround. Still, lingering questions fuel arguments for both sides of the table.

On the optimistic front, Boeing recently sent a shot across the bow, affirming to shareholders and competitors alike of its recovery initiative. Late last month, BA stock popped higher following the aerospace giant’s presentation at the Bernstein Strategic Decisions Conference. There, management outlined its ambitious plans to ramp up production of the 737 Max to 47 units per month by the end of the year.

More importantly, a 737 Max jetliner just landed at Boeing’s Zhoushan completion center near Shanghai, China, signaling the resumption of deliveries to Chinese airlines. Such deliveries were previously halted for a month due to rising trade tensions.

At first, President Donald Trump raised tariffs on Chinese goods to 145%, prompting China to impose 125% tariffs on U.S.-made products. This retaliatory measure included aircraft, representing a direct headwind against BA stock. Subsequent negotiations reduced most mutual tariffs to 10%, laying the groundwork for the Boeing deal. To note, China accounts for about 10% of Boeing’s commercial aircraft backlog.

Nevertheless, BA stock suffers from serious issues that investors can’t afford to ignore outright. Primarily, the trust and credibility that Boeing is attempting to rebuild is fragile. Most prominently, the lingering effects of the two fatal crashes involving the 737 Max still haunt the company. Furthermore, the non-prosecution agreement between the Department of Justice and Boeing opened wounds for victims’ families.

Investors should also recognize that the aerospace firm’s financials are stressed, particularly due to a significant decline in free cash flow (FCF). In the most recent quarter, FCF slipped to $4.1 billion below parity, a sharp turn from the positive $3 billion in the previous quarter. As such, the drain indicates continued cash burn.

The Direxion ETFs: Given that a case can be made for Boeing to move in either direction, the underlying security makes for an interesting trading prospect. Financial services provider Direxion offers specialized exchange-traded funds for those interested in speculating on BA stock.

Aggressive optimists may consider the Direxion Daily BA Bull 2X Shares BOEU, which seeks the daily investment results of 200% of the performance of Boeing stock. On the flipside, pessimists may take a look at the Direxion Daily BA Bear 1X Shares BOED, which seeks 100% of the inverse performance of the namesake security.

In either case, the Direxion ETFs offer a convenient platform for speculation. Generally, those interested in leverage or short bets must engage the options market. However, derivatives essentially represent a market within a market, adding multi-layered complexities. In contrast, the BOEU and BOED can be bought and sold like any other public security, thus mitigating the learning curve.

Still, prospective investors must be aware of the risks of these Direxion funds. First, leveraged and inverse ETFs can be highly volatile, especially compared to “vanilla” ETFs that track the major indices. Second, these specialized products are designed for exposure lasting no longer than one day. Holding these funds for longer than recommended may result in value decay due to the daily compounding effect.

The BOEU ETF: The Direxion Daily BA Bull 2X Shares has been a strong performer this year, gaining nearly 47% on Boeing’s turnaround efforts.

• BOEU has been marching higher in a step-wise fashion, implying the absorption of positive news following periods of consolidation.
• Due to its short time in the market, BOEU doesn’t offer many signals. That said, the price action is comfortably above its 20-day exponential moving average (EMA).

The BOED ETF: The Direxion Daily BA Bear 1X Shares has struggled so far in 2025, with investors buying into the resurgence narrative.

• In contrast to its bullish counterpart, BOED has largely collapsed on low volume, raising concerns about forward viability.
• BOED appears to be baselining at the $19 level, which could be encouraging. Still, momentum is weak, given that it’s well below its 20-day EMA.

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