General Dynamics (NYSE:GD) – This company is the world’s fifth largest military contractor and one of the world’s biggest makers of corporate jets. The government has made it clear that it intends to initiate broad cuts in defense and aerospace systems, which are at the heart of GD’s revenue growth.
Technically the stock is in a sharp downtrend that followed the crossing of its 50-day moving average (blue line) through its 200-day moving average (red line) in late July, called a “death cross.” By breaking the support (red dash line) of a bearish channel down it went into a free fall. A reversal occurred early last week at around $58, but should have limited impact with a target of just $64. The stock should be sold on such rallies.
- See Sam Collins’ Daily Market Outlook: How Deadly is the S&P’s Death Cross?
- See Serge Berger’s Daily Market Outlook: Why This Relief Rally Still Has Some Time Left
- See Serge Berger’s Trade of the Day: RIMM Almost Ripe for the Picking
