General Dynamics (NYSE:GD) – This is the world’s fifth largest military contractor and one of the 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, which is called a “death cross.” After breaking the support (red dash line) of a bearish channel down it went into a free-fall.
On Sept. 8, the Trade of the Day recommended selling it short at the market ($60) and it subsequently broke a triple-bottom falling to $55, our target. But GD is giving us another opportunity to sell with the current market rally. Sell short at $59 with a target of $52.
- See Sam Collins’ Daily Market Outlook: How Long Before the Bulls Give Up?
- See Serge Berger’s Daily Market Outlook: 3 Investments That Are Better Than Stocks Right Now
