Boeing 737 MAX 10 Certification Delayed by New Software Issue

Boeing shares edged higher in Tuesday premarket trading, after falling 6.91% on Monday.

The stock came under pressure following reports that a software issue affecting some 737 MAX aircraft could render autopilot tools inoperative in certain landing scenarios.

737 MAX 10 Certification Faces New Delay

According to Reuters, FAA Administrator Bryan Bedford has delayed certification of Boeing's 737 MAX 10 until the newly disclosed software issue is resolved.

Boeing said the issue affects some 737 MAX aircraft. In one specific landing scenario, pilots could lose access to automated flight guidance. The company has notified operators and is developing a permanent software fix.

The FAA said the issue could increase pilot workload during go-arounds.

Regulators previously said they would convene a corrective action review board to examine the issue. However, two sources told Reuters the review is unlikely to begin before next week.

The review will determine whether additional aircraft rework is needed. It could also push certification of the MAX 10 months beyond the previously expected October timeline.

Boeing has faced heightened regulatory scrutiny since late 2019 following multiple safety-related incidents.

Earlier this month, Boeing paid the FAA $3.1 million after regulators cited multiple safety-related violations, including issues tied to the 2024 Alaska Airlines 737 MAX 9 cabin panel incident.

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NASA Plans Starliner Redesign

Separately, NASA's Dana Weigel said Boeing has implemented fixes to its Starliner-1 spacecraft after determining the cause of a helium leak.

NASA Administrator Jared Isaacman said parts of Starliner will also be redesigned ahead of the planned crewed mission in 2028.

Boeing's Starliner program is expected to conduct up to five crewed missions to the International Space Station for NASA.

Boeing Technical Analysis

Boeing remains in a clear downtrend.

The stock is at $185, trading about 9.2% below its 20-day simple moving average, 13.5% below its 50-day simple moving average, and 16.3% below its 200-day simple moving average.

Meanwhile, Boeing's relative strength index stands at 27.84. An RSI below 30 typically indicates oversold conditions.

However, oversold readings do not necessarily mark a bottom. In a prolonged downtrend, a stock can remain oversold for extended periods.

The broader technical picture also remains bearish. Boeing's 20-day simple moving average is below its 50-day simple moving average, which remains below the 200-day simple moving average. The stock formed a death cross in September.

Boeing has support near $177, close to its 52-week low of $176.77. Resistance sits near $215.50, around its longer-term moving average band.

ETF Holdings

Boeing is a major holding in several aerospace and defense ETFs.

The company accounts for approximately 9.58% of the iShares U.S. Aerospace & Defense ETF's weight, 7.20% of the Invesco Aerospace & Defense ETF's weight, and 4.17% of the Corgi Aerospace & Commercial Aviation ETF's weight.

Given Boeing's significant weight in these funds, ETF inflows and outflows could also impact trading in the stock.

Boeing Analyst Outlook

Boeing carries a consensus Buy rating with an average price target of $274.44.

Jefferies maintained a Buy rating on September 21 but cut its price target to $265. BofA Securities maintained a Buy rating and $270 price target on September 18. Argus Research upgraded Boeing to Buy on August 11 with a $265 price target.

BA Stock Movement

Based on Tuesday premarket trading data, Boeing shares rose 0.33% to $185.