Buy Aerospace Stock’s Minor Correction Before It Takes Off

TXT is likely to pull back to its 50-day moving average before trading higher

   
Buy Aerospace Stock’s Minor Correction Before It Takes Off

Textron (TXT) — This aerospace and industrial giant makes Cessna business jets, Bell helicopters and military equipment. The company reported Q4 revenue of $3.51 billion versus expectations of $3.41 billion, and earnings per share (EPS) of $0.59 per share.

According to S&P, improving economic growth worldwide bodes well for the business jet market. It sees earnings rising to $2.20 in 2014 from $1.75 in 2013, and it projects $2.55 in 2014. It has a 12-month price target of $44. 

On Jan. 31, with the stock trading just under $36, I said, “Technically TXT is in a sharp intermediate uptrend with volume spikes on the upside and lower volume on declines.” I recommended traders buy it under $36.50 with a target of $42.

The stock reached a new 52-week high of $40.55 on Friday, but it now appears to be rolling over into a minor correction. Buy TXT on a pullback to its 50-day moving average at $37 for a trade to $44. Investors could buy it as a long-term hold in the aerospace sector.

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Article printed from InvestorPlace Media, http://investorplace.com/2014/03/trade-day-textron-txt-2/.

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