3 High-Flying Defense Stocks Flexing Their Muscles (LMT RTN NOC)

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defense stocks - 3 High-Flying Defense Stocks Flexing Their Muscles (LMT RTN NOC)

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Aerospace and defense stocks have been on the march higher, leaving Benjamins in their wake for bulls, one and all, to collect.

3 High-Flying Defense Stocks Flexing Their Muscles (LMT RTN NOC)

And collect they are. Any and all buying opportunities this year have been seized upon by defense stock lovers. The occasional bouts of profit-taking have been stymied in short order keeping the assortment of uptrends in the space well intact.

Last week a mild pullback took root in the defense sector ushering many stalwarts in the sector back down to low-risk entry points.

Indeed, my watch list for quality setups is littered with aerospace names. Here are the top three.

Defense Stocks to Buy: Lockheed Martin Corporation (LMT)

LMT
Click to Enlarge
Source: OptionsAnalytix

Year-to-Date Gain: 10.6%

Lockheed Martin Corporation (LMT) tops the list with a trend worth bragging about. The Bethesda-based aerospace kingpin boasts a chart just screaming relative strength.

Indeed, this year LMT is embarrassing the S&P’s puny 50 basis point gain with a gain of 10%-plus this year. Indeed, in a go-nowhere, do-nothing environment buyers have flocked to LMT to bask in its profit-giving ascent.

If you’ve yet to hop aboard the defense train, then consider the current retracement in LMT an opportunity worth taking.

The liquidity in LMT option contracts leaves much to be desired: Go with a straight stock purchase on a break above $241.

Defense Stocks to Buy: Raytheon Company (RTN)

RTN
Click to Enlarge
Source: OptionsAnalytix

YTD Gain: 3.5%

Although our next contender has failed to garner as many gains as LMT, she has an equally compelling buy pattern. Raytheon Company (RTN) scored a breakout late last month and has returned to the scene of the crime.

We’re talking a resistance retest for RTN, a bona-fide trial of whether the old principle of polarity will prove true once more.

Of course, we’re talking about old resistance becoming new support here. The $128 zone was a well-established ceiling that just recently gave way. And now we’ll see if it will prove as impenetrable a support level.

Should RTN rebound from here, snatch up the Aug $130 calls.

Defense Stocks to Buy: Northrop Grumman Corporation (NOC)

NOC
Click to Enlarge
Source: OptionsAnalytix

YTD Gain: 12.6%

Northrop Grumman Corporation (NOC) rounds out our list of defense stocks, and she’s a beaut. Matter of fact, NOC’s chart is virtually identical to Lockheed Martin’s.

Since notching a new all-time high earlier this month, NOC has receded nicely to the rising 20-day moving average. The volume patterns have been quite bullish of late, suggesting buyers are still flocking to the stock.

Use this dip to your advantage by snatching up the Aug $210 calls.

At the time of this writing Tyler Craig had no positions on any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/05/defense-stocks-lmt-noc-rtn/.

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