EarningsBeats.com Digest for February 28, 2022
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Is It Time To Be Defensive With Defense?
Defense stocks ($DJUSDN) have come to life, rising 6% in just the past two trading sessions. The group is likely drawing more attention due to the Russia-Ukraine conflict, but history tells us this is a pretty strong long-term performer and one that's not as likely to be subject to higher inflation and higher interest rates. Defense stocks
quadrupled in the five years spanning 2013-2018. They've since traded mostly sideways, but they now have their all-time high at 554 in sight. Over the weekend, I wrote an article in the StockCharts.com's ChartWatchers newsletter featuring this group and a few component stocks that have recently broken out. But many of you might prefer Lockheed Martin (LMT), which has a very solid dividend yield of 2.74% and has raised its dividend every year for the past two decades. The
technical action looks solid as well:
I've annotated a number of blue circles on this chart, highlighting breakouts of differing magnitudes. The biggest one, however, is LMT's price breakout to a fresh 52-week high. I would expect we'll see some profit taking fairly soon and that could carry the stock back to the 385-395 area, which would represent solid reward-to-risk entry. I'd consider LMT an uptrending stock unless both price support and its 50-day SMA, currently near 373, are
lost.
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Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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