One sector that’s not defensive…defense. Learn to play offense. (Feb 20. 2015) Stock Market Mentor
BA LMT RTN NOC BA NOC HON NOC HON UTX LLL BEAV
We’re going to be looking at several different stocks. The Aerospace & Defense Sector; from what I’ve seen the financial media has been looking elsewhere but traders certainly haven’t. You look at Boeing ( NYSE:BA ); I think the Defense Sector is smokin’ hot.
Boeing ( NYSE:BA ), weekly chart, over at Option Market Mentor we had a hedged position, a bull call spread on this, we’ve had it for a while, just last week I removed the hedge. It was a long-term position and I said “You know what? This is going higher, we just want to be trading this with no hedge whatsoever and let our profits run.” I think that was a right call.
But look at these others, and by the way, these companies don’t announce earnings really until the end of April so you’ve got, effectively, two more months before there’s a catalyst to sell these darn things. Lockheed Martin ( NYSE:LMT ), just breaking out of a volatility squeeze, this has more upside, I think a lot more.
Raytheon ( NYSE:RTN ) hasn’t yet broken out, set an alert for $110.00, maybe make it 111.00. If the stock starts trading above $111.00, we’ll actually make it 110.00, what the heck, you want to be looking to buy this stock. Northrop Grumman ( NYSE:NOC ), nice uptrend, just ride the trend; the weekly chart shows this is a heck of a lot smoother than Boeing ( NYSE:BA ) isn’t it? I would have been nice to be long Boeing ( NYSE:BA ) way back when but you don’t get to do that.
Northrop Grumman ( NYSE:NOC ) works right now, it’s not a great buy point. You’re late if you’re buying it right now, you’re definitely not early, but are you too late? I don’t think so. You can wait. If you want to get a better pull back, if you want to say, “Well I’m not going to buy this stock until it hits the 20-day moving average, that’s the middle Bollinger Band, I think that’s fair too. What I’m saying is, this is a trending stock and the trend is up.
Honeywell ( NYSE:HON ), you know it’s okay, I would rather own Lockheed Martin ( NYSE:LMT ) than Honeywell ( NYSE:HON ). United Technologies ( NYSE:UTX ), ever since it broke out of this reverse head and shoulders the stocks been doing really well. This is one you can own it’s a Dow component by the way and the Dow’s moving higher, so is this. In fact where is this relative to everything else? At an all time high. We like stocks that hit all time highs because they tend to keep dong it for a while.
Okay just a couple more, L-3 ( NYSE:LLL ), breakout above 130.00, this stock I think is working too, it’s poised to go higher, this works. Finally, B/E Aerospace ( NASDAQ:BEAV ), different than all the others. These others have all been pretty much trending higher; this has really been in correction mode. I’m looking at this now saying, “Okay, the 200-day moving average has been resistance for this stock, it’s finally broken through the resistance from stock at higher levels clear back here in July.” That’s not particularly relevant, that’s over seven months.
Do you really think the folks that bought here at $65.00, expecting the stock to bounce then it didn’t and instead it fell down effectively 40 percent or something like that, do you think they’re holding their stock still saying, “If I can get $65.00 for it then I’m going to go ahead and sell the stock?” No. They’re either long gone or they’re just holding on. So this doesn’t matter so much back here. I look at this as a higher high relative to this one. B/E Aerospace ( NASDAQ:BEAV ) works as well.
I hope this has been helpful to you. I do these sector spotlights pretty much every weekend in our weekend update. I just wanted to show you what one of them is like. For those of you that aren’t members I’d love it if you’d try out Stock Market Mentor for a month on me, but otherwise just keep sticking with the “Free Charts” and hopefully you’re making money on these too, because that’s really the idea.
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