General Dynamics (NYSE:GD) – This company is the world’s fifth largest military contractor and one of the biggest makers of corporate jets. TheU.S. 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, which is known as a “death cross.”
By breaking the support (red dash line) of a bearish channel down GD went into a free fall. A reversal occurred in early August at around $58, but as predicted in our Aug. 17 Trade of the Day, the rally failed at about $64.
The new stochastic sell indicates that the lows will likely be broken on the next market decline. Sell GD at market. Short sellers’ target is $53 to $55.
- See Sam Collins’ Daily Market Outlook: How to Spot the Next Market Reversal
- See Serge Berger’s Daily Market Outlook: Sorry, Bulls, It’s Still a Bear Market
- See Serge Berger’s Trade of the Day: Your Prescription for Trading Walgreen
