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Sell This Defense Stock Dud

After executing key reversal, General Dynamics likely to continue falling


General Dynamics (NYSE:GD) — This is the world’s fifth largest military contractor and one of the key makers of small jets. Because of its dependence on government orders, GD has had its earnings and price objective regularly cut by analysts.

Technically, it is attempting to consolidate at $66 after falling from a high of over $74 earlier this year. But a death cross in June and high-volume selling, which tested the support at $62, will likely give way to lower prices on the next move down. Long-term owners should consider selling this stock and switching to better long-term prospects.

The stochastic is overbought and price action executed a key reversal on Monday. Short sellers should check with their broker for special requirements and place a stop-loss order 5% above their short-sale price in order to protect against unlimited losses.

Trade of the Day -- General Dynamics (NYSE:GD)
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Trade of the Day Chart Key

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