As North Korea begins to denuclearize, defense-related stocks Boeing, General Dynamics, Lockheed Martin and Northrop Grumman show risk of technical corrections with two of these four leading the way.
Of the four major defense stocks Boeing is the leader. It’s a component of the Dow Jones Industrial Average and is up 25.7% year-to-date. Boeing (BA) set its all-time intraday high of $374.48 on June 7 as its commercial aircraft production keeps this stock the clear winner among the four. The stock has a positive weekly chart,
General Dynamics (GD) is down 2.4% year-to-date and peaked at $230.00 on March 9. It is already in correction territory, 13.7% below this high. GD has a negative weekly chart.
Lockheed Martin (LMT) is down 1.8% year-to-date and peaked at $363.00 on Feb. 16. It is already in correction territory, 13.2% below this high. The stock has a negative weekly chart.
Northrop Grumman (NOC) is up 7.3% year-to-date and is down 8.7% since setting its all-time intraday high of $360.88 on April 5. The stock has a neutral weekly chart as its stochastic reading is rising slightly.
Here’s The Scorecard For These Defense Stocks
The daily chart for Boeing
The daily chart for Boeing shows that the stock began 2018 well above the bullish pattern called a ‘golden cross’ where the 50-day simple moving average of $345.37 is above the 200-day simple moving average of $307.46. The stock has been above its 50-day SMA since May 7. The key horizontal lines include my annual value level of $250.43, which is the downside risk for the remainder of 2018. On April 4 the stock held the horizontal line of $316.79, which is my second quarter value level. The recent high was a test of this week’s risky level of $373.72.
The daily chart for General Dynamics
The daily chart for General Dynamics show that the stock just formed a negative cross-over called a ‘death cross.’ This occurs with the 50-day simple moving average of $207.59 is below the 200-day simple moving average of $208.95 indicating that lower prices lie ahead. The horizontal lines below the price action are my weekly and annual value levels of $191.61 and $188.88, respectively. My monthly and semiannual risky levels are the horizontal lines at $213.12 and $226.70, respectively.
The daily chart for Lockheed Martin