Lockheed Martin Corporation (NYSE: LMT) seems to be gearing up for a surge as per its latest charts. Lockheed Martin Corporation is an American aerospace, arms, defense, information security, and technology corporation with worldwide interests.
Bullish Indications
#1 Double Bottom Pattern: The daily chart shows that the stock was forming a double bottom pattern. This is marked in pink color. A double bottom pattern is a bullish reversal pattern and a breakout from it indicates that the stock could move upwards. Currently, the stock looks poised for a breakout from the double bottom pattern, indicating possible bullishness.
LMT – Daily Chart
#2 Price above MAs: The price is currently above the short-term moving average of 50-day SMA as well as the longer-term moving average of 200-day SMA. This usually implies a possible bullish bias for the stock.
#3 Bullish ADX and DI: The ADX indicator shows bullishness because (+DI) is greater than (-DI) and ADX has moved above from below both (+DI) and (-DI) lines.
#4 Bullish Stochastic: The %K (blue) line of stochastic is currently above the %D (Orange) line in the daily chart. This is a possible bullish indication.
#5 Symmetrical Triangle Pattern Breakout: The weekly chart shows that the stock has broken out of a Symmetrical Triangle pattern. This pattern is a continuation pattern and is characterized by two converging trend lines connecting a series of sequential peaks and troughs. This is marked on the chart as purple lines. A breakout from a symmetrical triangle pattern usually signifies the start of a bullish move. The stock is also trading above its 50-week and 200-week SMA, indicating bullishness.
LMT – Weekly Chart
#6 MACD above Signal Line: In the weekly chart, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.
#7 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the weekly chart. This indicates possible bullishness.
#8 Bullish ADX and DI: The ADX indicator shows bullishness in the weekly chart, as the (+DI) and ADX lines are greater than the (-DI) line.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of LMT is above the price of around $403.00.
TP: Our target prices are $423 and $436 in the next 3-5 months.
SL: To limit risk, place a stop loss at $392. Note that this stop loss is on a closing basis.
Our target potential upside is nearly 5% to 8% in the next 3-5 months.
For a risk of $11, the target rewards are $20 and $33. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 3x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the symmetrical triangle pattern. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in its sector.
Happy Trading!
— Tara
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