If you haven’t been paying attention to the Syria crisis, crawl out from under your rock. The point for investors is that the Syrian missile crisis has backed the White House into a corner and threatens to diminish the credibility and power of the president. And, unfortunately, throughout history, a weakened presidency has led to a weakened stock market. I could cite many examples, but just a few recent ones are George W. Bush’s contested 2000 election (the repercussions of which played a role in the 2000-2002 bear market), the Clinton impeachment process of 1998 that coincided with a big slide in prices and the Nixon impeachment process that was part and parcel of the 1973-1974 bear market.
Investors should hope that, no matter how they personally come down on the question of striking Syria, the matter is resolved soon in a way that is decisive and leaves the president with a firm hand.
In the midst of this uncertainty, there are still plenty of opportunities to make money in stocks and options.
Northrop Grumman (NOC), a major defense contractor with products focused on aerospace, electronics, cybersecurity and logistics, stands to benefit if the U.S. intervenes in Syria. The stock regularly comes into the middle of its 20-day Keltner channel, and bounces higher back to touch the top of the channel.
Recommendation: Buy NOC at current levels for a $97.10 target.
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